Tariffs - a Keynesian delight

Procurement is getting the slow hand clap from the back of the C-Suite. The Finance Director has called his pals in Big Economist Partnership LLP for guidance. 

Economists rarely turn up to procurement strategy sessions. But if they did, they would say: “We’re taking a trip to Milton Keynes.”    

And then: “What would Keynes do?”.

Or 

“What would Friedman do?”. 

Depends on your perspective, like everything. Economists in particular like to give an illusion of depth in a 2D world. 

Let’s take these top historical economists one at a time and carefully compare and contrast. In Blog #3 we’ll focus on Keynes. 

We don’t know if John Maynard Keynes ever sourced semiconductor-grade aluminium (a-lu-minum, stoopid) from Vietnam, or had to calculate the landed cost of Canadian cheese in a post-tariff world. But if he had, we reckon he’d have had a few thoughts. 

Keynesian economics, for the uninitiated and blissfully spreadsheet-bound, is based on one revolutionary premise: governments should do stuff when markets look sad.  

Spend more.  

Support employment.  

Try to keep the lights on when everyone’s panicking. 

In Keynes-speak: 

• Demand is king. 

• Jobs matter more than invisible hands. 

• And sometimes you need to tax less and spend more... preferably on jam, bridges, or oddly specific procurement software. 

Now Keynes wasn’t anti-trade. He didn’t shout at shipping containers. But he did acknowledge that in some cases, governments might want to slap a tariff or two on imports - not forever, just until the domestic economy’s had a cup of tea and a lie-down. 

Tariffs might be okay when: 

• Your industries are wheezing like asthmatic ex-presidents. 

• Everyone’s unemployed except Rachel from Accounts (who’s somehow still got a job because of her CV writing skills). 

• Your economy needs a big hug before it heads off on a jet to sunnier climes. 

But even then, tariffs were like that emergency chocolate bar. You only use it when things are dire. And you definitely don’t build your diet around it. 

Fast forward to Orange times, where Keynes is quietly spinning in his velvet-lined grave. 

Trump’s tariffs? A mixed bag through Keynesian lenses. 

✅ Maybe Keynes would have approved... briefly: 

• Local manufacturers had a fighting chance—at least until their procurement teams had a nervous breakdown. 

• Domestic investment went up (a bit) in places that spell “infrastructure” with a rusty wrench. 

❌ But Keynes would NOT be amused: 

• Costs rose. Demand staggered. The average toaster became a luxury item. 

• Consumer power dipped lower than an energy minister’s intelligence. 

• Retaliation ensued. Trade wars broke out. Someone lost their soybeans and maple sauce (not together in the same bowl). 

If Keynes had a procurement department (he didn’t), they’d say this: 

• “Track trade policy on a daily, sorry hourly, basis.” 

• “Model scenarios with the biggest spreadsheet you can find” 

• “Sharpen your legal clauses with tariff-y  goodness". 

• “Find local suppliers before they leave the country.” 

Keynes loved a multiplier effect - and no one wants the unintended kind, so get some new batteries for your giant desk calculator. 

In conclusion, dear buyers of things - but mostly goods, not services: 

Tariffs through Keynesian eyes are neither hero nor villain. They’re merely a plot device in an economic drama that procurement’s been dragged into, just players on a global stage that is turning from comedy to tragedy. 

If you’ve read this particular tariff script to the end you’ll know you should stay agile, watch the data, and take a trip to Milton Keynes.  

If Friedman did the straight bits, then Keynes did the roundabouts. And Keynes is getting all the applause, even if he is going round in circles.