Between 2018–2019 (and in subsequent policy actions), the U.S. government raised tariffs on a wide range of imports—targeted initially at steel and aluminum and later at many Chinese goods—aiming to protect U.S. industry, shrink trade deficits, and encourage reshoring. Economists studying the period treat these measures as large, economy-wide experiments in protectionism whose effects can be measured across prices, production, employment and trade patterns. (NBER)
Context of Trump’s tariff policies
The administration used multiple legal authorities (e.g., Section 232 on national security, Section 301 on unfair trade practices) to impose tariffs on hundreds of billions of dollars of imports. These tariffs raised effective U.S. import protection on targeted goods and drew retaliatory tariffs from trade partners. Analysts estimate that these actions substantially raised import costs on a wide set of manufactured goods and inputs. The U.S. International Trade Commission (USITC) and independent researchers have documented both the protective gains to covered industries and the costs borne by downstream users. (USITC)
Sectoral impacts
Manufacturing: complex and mixed
Tariffs were intended to boost U.S. manufacturing, but the empirical record is nuanced. Tariffs made imported inputs more expensive, raising costs for domestic manufacturers that rely on global supply chains. Several studies found net reductions in manufacturing output and employment in industries exposed to tariffs because higher input costs and retaliatory foreign tariffs harmed competitiveness and export demand. In other words, while some protected producers (e.g., primary steelmakers) saw price support, many downstream and export-oriented manufacturers suffered. (Federal Reserve)
Agriculture: hit by retaliation and lost markets
American farmers were among the most visible victims. U.S. agricultural exports fell after trading partners imposed retaliatory duties, with analysts documenting billions in lost sales and lower farm-sector incomes in affected crops and regions. Even with government assistance programs that offset some farm income losses, agriculture sustained meaningful damage from the tariff-triggered trade disruptions. (Tax Foundation)
Consumers & small businesses: higher prices and squeezed margins
The consensus across multiple studies is that much of the tariff burden fell on U.S. importers and consumers through higher retail prices. Instead of foreign exporters absorbing the levies, domestic firms typically passed them along in the form of higher input or consumer goods prices. That raised costs for households and for small firms that could not easily substitute suppliers or pass on higher prices to customers. Several analyses estimate measurable reductions in real U.S. income because of tariff-driven price increases. (NBER)
Effects on inflation, jobs and global trade
Inflation and consumer prices
Tariffs directly raise the price of affected imports; empirically, a large share of those increases translated into higher U.S. prices. While the 2018–19 tariffs were only one of several inflationary pressures in later years, they contributed to goods-price increases in affected categories and reduced aggregate real income compared with a no-tariff counterfactual. (NBER)
Employment: local gains, broader losses
At the local level, tariff exposure produced some political and employment shifts—regions heavily concentrated in protected industries sometimes saw relative employment resilience and associated political support. But at the national level, research indicates tariffs reduced manufacturing employment overall in exposed sectors and depressed employment growth in industries reliant on imported inputs or exports. The net labor-market effect was therefore mixed and in many analyses negative for manufacturing as a whole. (NBER)
Global trade patterns
Tariffs triggered retaliatory measures and prompted some re-routing of trade and supply-chain adjustments. U.S. exports to retaliating countries fell in many categories, and firms sometimes restructured sourcing—raising costs and reducing near-term efficiency. Longer-term supply-chain diversification occurred in some sectors, but that transition is costly and protracted. The overall result was higher friction in global trade and reduced welfare in several affected markets. (PIIE)
Who gained and who lost—summary
- Gained: A narrow group of upstream producers (e.g., some steel and aluminum firms) that faced less import competition.
- Lost: Downstream manufacturers using imported inputs, farmers hit by retaliation, retailers and consumers paying higher prices, and exporters facing lost foreign demand. The aggregate welfare evidence points to a net cost to U.S. real income. (USITC)
Future outlook under the current policy environment
If high tariffs remain or expand, expect continued pressure on supply chains, higher input costs for manufacturers, and politically uneven effects across regions and industries. Some domestic industries may see short-run price relief, but broader competitiveness and export performance can be harmed—especially for sectors deep in global value chains. Policymakers weighing tariffs should balance narrow industrial protection against macroeconomic costs, consumer welfare losses, and the diplomatic friction that invites retaliatory measures. Recent analyses suggest that targeted industrial policy plus investments in workforce and technology may achieve sharper, longer-lasting gains than broad-based tariffs. (PIIE)
Practical takeaways for readers
- Tariffs can protect specific firms but tend to raise costs for consumers and firms that rely on imported inputs. (NBER)
- Agricultural communities remain vulnerable to retaliation and should plan for market diversification and risk mitigation. (Tax Foundation)
- Policymakers should pair any protectionist measures with clear transition support and a strategy to preserve export competitiveness. (USITC)
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Trump Tariff Impact on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff increases on a variety of imports, initially targeting steel and aluminum, and subsequently extending to a range of Chinese goods. These measures aimed to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration utilized various legal frameworks, such as Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs effectively increased protection for U.S. imports, leading to retaliatory tariffs from trade partners. Analysts estimate that these actions significantly increased import costs for a broad set of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to bolster U.S. manufacturing; however, the resulting empirical evidence presents a more nuanced picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers reliant on global supply chains. Several studies indicate net reductions in manufacturing output and employment in tariff-exposed sectors due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers became some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports saw a significant decline, leading to billions in lost sales and reduced incomes in affected regions. Even with government assistance programs designed to offset some of these income losses, the agricultural sector suffered substantial damage due to the trade disruptions triggered by tariffs “`html
Trump Tariff Impact on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff increases on a variety of imports, initially targeting steel and aluminum, and subsequently extending to a range of Chinese goods. These measures aimed to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration utilized various legal frameworks, such as Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs effectively increased protection for U.S. imports, leading to retaliatory tariffs from trade partners. Analysts estimate that these actions significantly increased import costs for a broad set of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to bolster U.S. manufacturing; however, the resulting empirical evidence presents a more nuanced picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers reliant on global supply chains. Several studies indicate net reductions in manufacturing output and employment in tariff-exposed sectors due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers became some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports saw a significant decline, leading to billions in lost sales and reduced incomes in affected regions. Even with government assistance programs designed to offset some of these income losses, the agricultural sector suffered substantial damage due to the trade disruptions triggered by tariffs “`html
Trump Tariff Impact on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff increases on a variety of imports, initially targeting steel and aluminum, and subsequently extending to a range of Chinese goods. These measures aimed to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration utilized various legal frameworks, such as Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs effectively increased protection for U.S. imports, leading to retaliatory tariffs from trade partners. Analysts estimate that these actions significantly increased import costs for a broad set of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to bolster U.S. manufacturing; however, the resulting empirical evidence presents a more nuanced picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers reliant on global supply chains. Several studies indicate net reductions in manufacturing output and employment in tariff-exposed sectors due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers became some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports saw a significant decline, leading to billions in lost sales and reduced incomes in affected regions. Even with government assistance programs designed to offset some of these income losses, the agricultural sector suffered substantial damage due to the trade disruptions triggered by tariffs “`html
Impact of Trump’s Tariffs on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff hikes on a variety of imports, initially targeting steel and aluminum, and later extending these measures to a wide array of Chinese goods. The primary goals of these tariffs were to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration leveraged various legal frameworks, including Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs significantly increased protection for U.S. imports, resulting in retaliatory tariffs from trading partners. Analysts estimate that these actions led to a substantial rise in import costs for a wide range of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to boost U.S. manufacturing; however, the empirical evidence reveals a more complex picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers that rely on global supply chains. Several studies indicate net reductions in manufacturing output and employment in sectors exposed to tariffs due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers emerged as some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports experienced a significant decline, resulting in billions of dollars in lost sales and reduced incomes in affected regions. Despite government assistance programs aimed at mitigating some of these “`html
Impact of Trump’s Tariffs on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff hikes on a variety of imports, initially targeting steel and aluminum, and later extending these measures to a wide array of Chinese goods. The primary goals of these tariffs were to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration leveraged various legal frameworks, including Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs significantly increased protection for U.S. imports, resulting in retaliatory tariffs from trading partners. Analysts estimate that these actions led to a substantial rise in import costs for a wide range of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to boost U.S. manufacturing; however, the empirical evidence reveals a more complex picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers that rely on global supply chains. Several studies indicate net reductions in manufacturing output and employment in sectors exposed to tariffs due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers emerged as some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports experienced a significant decline, resulting in billions of dollars in lost sales and reduced incomes in affected regions. Despite government assistance programs aimed at mitigating some of these “`html
Impact of Trump’s Tariffs on the U.S. Economy
Between 2018 and 2019, the U.S. government implemented significant tariff hikes on a variety of imports, initially targeting steel and aluminum, and later extending these measures to a wide array of Chinese goods. The primary goals of these tariffs were to protect U.S. industries, reduce trade deficits, and encourage the reshoring of manufacturing. Economists analyzing this period view these tariffs as extensive, economy-wide experiments in protectionism, with measurable impacts on prices, production, employment, and trade patterns. For a detailed analysis, you can refer to the NBER study.
Context of Trump’s Tariff Policies
The Trump administration leveraged various legal frameworks, including Section 232 concerning national security and Section 301 addressing unfair trade practices, to impose tariffs on hundreds of billions of dollars of imports. These tariffs significantly increased protection for U.S. imports, resulting in retaliatory tariffs from trading partners. Analysts estimate that these actions led to a substantial rise in import costs for a wide range of manufactured goods and inputs. Research from the U.S. International Trade Commission (USITC) and independent analysts has documented both the protective benefits for covered industries and the costs incurred by downstream users. For more insights, see the USITC report.
Sectoral Impacts
Manufacturing: Complex and Mixed Outcomes
The tariffs were designed to boost U.S. manufacturing; however, the empirical evidence reveals a more complex picture. While tariffs provided price support for some protected producers (e.g., primary steelmakers), they also raised the costs of imported inputs for domestic manufacturers that rely on global supply chains. Several studies indicate net reductions in manufacturing output and employment in sectors exposed to tariffs due to increased input costs and retaliatory foreign tariffs that undermined competitiveness and export demand. For further details, refer to the Federal Reserve analysis.
Agriculture: Hit by Retaliation and Lost Markets
American farmers emerged as some of the most visible casualties of the tariff policies. Following the imposition of retaliatory duties by trading partners, U.S. agricultural exports experienced a significant decline, resulting in billions of dollars in lost sales and reduced incomes in affected regions. Despite government assistance programs aimed at mitigating some of these