Labor crisis a more pressing threat than tariffs, says Maine Pointe CEO

The looming labor crisis a more pressing threat to US competitiveness than tariffs, according to a recent article by Maine Pointe CEO Joseph Esteves in Global Trade Magazine.

In the article – “The Real Threat to Global Competitiveness: Why CEOs Must Solve the Labor Crisis Now” – the Maine Pointe head says labor shortages, high turnover, an aging workforce, and a growing skills gap present an existential challenge to business leaders.

This sentiment is even truer if organizational leaders believe the “TACO” moniker the president has gained on Wall Street – an acronym standing for “Trump Always Chickens Out.” Markets have in the last month broadly returned to their pre-Liberation Day levels based on assumptions that the Trump administration will find its way to tariff levels of about 10%.

Nonetheless, the uncertainty associated with the Trump administration’s vacillation on trade policy (especially with manufacturing giant China) makes it difficult for leaders to perform long-term planning, especially where substantial capital investment is required.

And although the current administration is trying to incentivize reshoring to the US, such efforts require significant time, effort, and investment, Esteves says.

Moving production home faces challenges including higher labor costs, shortages of skilled labor, and rising costs of raw materials. Are consumers willing to pay $3,500 or more for a standard US-made iPhone?

Technology – especially rapid advances in generative AI – is a widely proposed avenue for addressing the labor crisis. Organizational leaders will generally frame AI as “augmenting” the abilities of current workers and boosting their productivity rather than replacing them.

Esteves says that technology alone isn’t the solution to the labor crisis, and that the most successful firms will find a balance between automation and human expertise.

Nevertheless, AI in its more mature implementations will certainly cause a displacement of labor. The only question is “how much?” and “how fast?”

Dario Amodei, CEO of AI firm Anthropic, recently forecasted that AI could eliminate approximately half of entry-level white-collar jobs and cause unemployment to reach as high as 20%.

In any case, Esteves says that companies with a stable workforce – strengthened by upskilling, retention strategies, and embracing flexibility – will be able to withstand various geopolitical challenges, including tariffs.

“The labor crisis represents the true long-term threat to global competitiveness,” he concludes. “While tariff uncertainty and trade policies will continue to influence global business operations, it is the ability to maintain a skilled, stable, and engaged workforce that will determine which companies thrive in the face of these challenges.”