Here Comes The Cute Penguins

A trade deficit occurs when a country imports more goods and services than it exports.

Trump’s Reciprocal Tariff seeks to punish countries that export more goods to the US than import goods from the US, by imposing a tariff or “import tax” on goods arriving on US shores from those countries. He wants those countries to “re-balance the trades” by importing more goods from them (by doing a deal with his administration for the tariffs to be dropped) or build factories in the US and create more jobs for Americans.

This makes no sense.

Imagine you’re buying stuff from Home Depot for your home. Home Depot never buys anything from you. This is a “trade deficit” from your point of view, and a “trade surplus” from Home Depot’s. Is this a bad thing?

First of all — if you gained no value from your Home Depot’s purchase — you would never buy it from Home Depot in the first place. So the fact that you’re actually buying stuff from it means that you want or need to buy them for your purpose.

Secondly — if you’re buying some materials from Home Depot like wood and you then proceed to make a cabinet out of them and sell them for 5 times what you paid for them, to another person — what does it matter if you have a deficit with Home Depot? In fact, Home Depot made it possible and much easier for you to make the money than if you had to chop down a tree yourself to get the wood you need.

Thirdly — Trump left out services provided by the US to the world that, when added together with the goods it sells to them, would actually result in a trade surplus for the US with many of the countries it’s now imposing tariffs on!

So if “trade deficit” is the justification for the tariffs, why exclude services that the US exports?

These services include:

• Digital Services
  These services, delivered over information and communication technologies, include software licensing, cloud computing, and data storage. The U.S. has a comparative advantage in this sector, with manufacturers being significant exporters of digitally enabled services.

• Financial Services
  The U.S. is a global leader in financial services, exporting banking, insurance, and investment services. This sector plays a crucial role in the services trade surplus.

• Intellectual Property and Licensing
  Exports in this category include royalties for the use of intellectual property, such as patents, trademarks, and franchises. The U.S. earns substantial income from licensing its intellectual property to foreign entities.

• Travel and Tourism
  Foreign visitors to the U.S. contribute to the economy through spending on accommodation, food, and entertainment. This sector has historically been a significant contributor to the services surplus.

• Professional and Business Services
  This includes legal, accounting, consulting, and engineering services. U.S. firms export these services globally, contributing to the trade surplus.

Here are some of the countries that the US has a trade surplus with:

Countries with U.S. Trade Surpluses in 2024 ← links to source

• South and Central America: $47.3 billion surplus

• Netherlands: $55.5 billion surplus

• Hong Kong: $21.9 billion surplus

• Australia: $17.9 billion surplus

• Belgium: $6.3 billion surplus

• United Kingdom: $11.9 billion surplus​

Here’s a screenshot that I took from the source in the link above:

Yet — all of the countries above with the US having a trade surplus are slapped with a 10% tariff for goods they’re exporting to the US.

Not only that, the uninhabited Heard Island and McDonald Islands — remote Australian territories in the southern Indian Ocean — have also been slapped with a 10% tariff. These volcanic, glacier-covered islands are home exclusively to penguins, seals, and seabirds, with no permanent human residents or infrastructure.

When the tariffs are based on official reasons that make no sense — what is everybody supposed to do?

As far as bringing manufacturing back to the US, to create more jobs for Americans, here’s why it’s not a realistic outcome:

1. Manufacturing jobs were outsourced to other countries starting in the late 1970s because those other countries could provide the labour needed at much lower wages.

2. Most Americans wouldn’t want to work in factories if they have a choice.

3. The cost of labour in the U.S. is substantially higher than in many countries where manufacturing has been outsourced to. So even if this can be done, the prices of products they produce will be significantly higher than even with the tariffs applied.

4. Advancements in automation and robotics have significantly increased manufacturing productivity, allowing factories to produce more with fewer workers. This has to happen, because labour costs in the US are significantly higher than the other countries it is currently outsourcing the manufacturing jobs to. This in turn reduces the number of jobs for Americans even if manufacturing returns to the US.

5. Modern manufacturing relies on intricate global supply chains. Reestablishing these networks domestically would require considerable time and investment. It will take years of effort to do this. China and the other countries have spent decades doing this and their supply chains are already well established. Give them an order and they can start manufacturing them within days — even hours.

6. The U.S. economy has become service-oriented. This shift reduces domestic demand for manufactured goods, making large-scale manufacturing less viable.

7. There is no certainty with the Trump administration that can impose tariffs at a whim, then pause them for a certain period of time for certain countries, then re-impose them again, then make exemptions for certain products, then clarifying they’re not exemptions, etc — with changes happening from day to day. Setting up and operating factories in the US will cost billions of dollars — and no company will do this without knowing for sure the tariffs will remain in place.

8. There is no guarantee the next President of the USA will not dismantle the tariffs already put in place, since there will be an election to elect one every 4 years.

There are more reasons but the above are enough for you to immediately see why bringing manufacturing jobs back to the US is wishful thinking at best.

The 10x lessons for the employee, the entrepreneur or the investor

The danger isn’t in trade deficits or tariffs.

Because once you zoom out and look at how the world actually works, you realise:

Tariffs aren’t tools of smart economics.

They’re tools of political theatre.

And when decisions are based on optics instead of opportunity, the people who suffer the most…are the ones actually doing the work.

So if you’re trying to drive on this bumpy road — whether you work a job, run a business, or allocate capital — here are the 10x lessons as your takeaways:

1. You don’t win by hoarding — you win by leveraging

A trade deficit isn’t theft. It’s value exchange. If you’re an employee, don’t fear outsourcing — learn how to work with global teams and increase your leverage.

If you’re an entrepreneur, find the arbitrage and build on top of it. If you're an investor, back those who understand global supply chains — not those fighting them.

2. Protectionism is not strategy — it’s stagnation

Tariffs might feel like defending local jobs, but they’re often just smoke and mirrors. Smart strategy is about creation, not restriction.

Ask yourself: Am I building something that thrives because it’s good — or just because others are being held back?

3. Efficiency beats ideology

China didn’t dominate manufacturing by holding press conferences. They did it by becoming brutally efficient over decades.

As a worker, your job isn’t to resist the system — it’s to become so skilled and adaptable that no system can ignore you.

4. The real U.S. exports? Ideas, code, capital

The U.S. dominates services for a reason — it’s where the ideas get built. Software, IP, or financial services. These are modern power exports.

If you're an employee, train in industries that are digitally exportable. If you're an entrepreneur, build in sectors that can cross borders without shipping containers. If you’re an investor, invest in those sectors.

5. Visibility ≠ Value

Goods are visible. Services are invisible. Politicians focus on the former because it’s easier to photograph.

But the real money is made where the cameras aren’t pointed. Chase attention economic fundamentals, not attention.

6. Uncertainty kills real investment

The one thing that scares smart operators the most is unpredictability.

Employees want stable work environments. Entrepreneurs want regulatory clarity. Investors want predictability.

If policy keeps changing on a whim, capital will go somewhere it doesn’t.

7. Low-skill jobs aren’t coming back — and that’s not a tragedy

Automation isn't taking jobs — it's taking tasks. The jobs that are disappearing weren’t sustainable anyway.

The future belongs to those who adapt, retrain, and upskill.

You can mourn the loss of the past — or you can build a skillset that isn’t obsolete in five years.

8. Economic narratives are often political performances

Most economic policies aren’t made to actually improve the economy.

They’re made to win elections.

Always separate the narrative from the numbers. Look deeper than the headline. It’ll protect your money, your business, and your peace of mind.

9. Geography is not destiny anymore

The world is no longer just national economies — it’s nodes and networks. If you’re in the right industry with a laptop and Wi-Fi, you can build wealth from anywhere.

Think globally, act digitally. Invest in teams and products that scale across borders.

10. Complexity is the new moat

The more complex your understanding of economics, supply chains, policy, and capital flows… the harder you are to replace.

Employees who see the full picture will become indispensable. Entrepreneurs who understand the global puzzle will create bigger upsides. Investors who understand this will outperform the crowd.

In a nutshell, tariffs and trade deficits may make for good soundbites, but they’re terrible foundations for building a future.

Whether you're working, building, or investing — don’t fall for the illusion of control. Focus instead on what compounds.

They are skills, trust, systems, and adaptability.

Because the real winners aren’t playing defence.

They’re playing long-term offence — globally.

Cheers!

P.S. Protect your money and even grow them during this uncertain time (and especially during this time!) with the following:

1. Gold

2. Bitcoin

3. Altcoins Trading (Fully Automated)

NOTE:

The 10x Factors for investors’s content is educational in nature, with examples used to illustrate the learning points. We are not financial advisors and do not provide financial advice. Please speak to your financial advisor before making any investment decision. Note that every investment comes with its own risks and drawbacks. Past results cannot guarantee future returns. Do not invest with money you cannot afford to lose.

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