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"The reason that the so-called China shock was so much more damaging in the United States was because of the nature of America’s political economy. Sweden and Finland of course faced competition from cheap Chinese imports, but their corporations kept investing in raising productivity and diversifying. This allowed them to partly fend off competition, partly by moving into new areas. Workers in these countries also enjoyed the security of an extensive welfare state and what economists call an active labor market policy.

These workers were retrained and relocated and got help with finding new jobs. In the United States, you don’t have that. Instead you have this parasitic financial market. I think that given the US’s actual political economy, tariffs are going to deliver pain rather than gains."