Tariffs are Not the ‘Big Stick’ Policy that Trump Believes

By Troy Cofie

Tariffs are being used as a blunt tool to reorder the international trade system and impose their will on other countries. Trump touts tariffs as a wonder weapon that can fix the many ailments that afflict the United States. From reshoring manufacturing to the United States to replacing income taxes to generating jobs to demonstrate hard power on the international stage, Trump believes that tariffs can rejuvenate a romanticized past of U.S. economic strength. However, tariffs aren't what the Trump administration is purporting, nor will they benefit the majority of the U.S. population. 

First, what exactly are tariffs? Tariffs are taxes imposed on imported goods. According to the Council of Foreign Relations (CFR), importing businesses must pay taxes. So, no foreign exporters will pay the tariffs that are imposed. Additionally, based on recent research that CFR sourced, consumers have borne the brunt of previous tariffs that were imposed on China from the first-line tariffs that were imposed during Trump's first term. 

Furthermore, according to the CFR, tariffs can harm exporters because they drive them to either lower prices to maintain market shares or risk lower sales if they don't lower prices. Both options cause the exporting sector to lose profits. 

With this recent barrage, tariffs will cost Americans five times more compared to Trump's 2019 tariffs, as reported by the Peterson Institute of International Economics (PIIE). The PIIE also compiled economic research that analyzed the Tax Cuts and Jobs Act of 2017 (TCJA), if reinstated, would disproportionately affect lower-income to middle-income families in America. Others would argue that TCJA can help generate jobs for American workers because businesses with lower costs will be incentivized to invest. However, the possible gains that can be made from the TCJA would be completely outweighed by the costs of tariffs.

In 2018, Trump utilized "national security provisions in Section 232 of the Trade Expansion Act of 1962" to impose 25% tariffs on steel and aluminum products and, in 2020, extended these tariffs on steel-using products such as "nails, tacks, parts for cars [and], [and] tractors," according to research from Dr. Lydia Cox and Dr. Kadee Russ. Analyzing the impacts of these tariffs, these two economists highlighted how an increase in steel prices put U.S. exporters at a disadvantage because they had to compete with foreign businesses that were able to obtain steel for lower prices. 

Trump revealed his tariffs on the “Liberation Day” on April 2, 2025, during which he imposed a 10% tariff on all imported goods. Photo by Unsplash

The Tax Foundation estimated that downstream industries (industries that buy steel) experienced $3.4 billion in production from 2018-2021. Additionally, steel-intensive industries are put at a higher risk for job losses compared to other industries. Dr. Lydia Cox and Dr. Kadee Russ furthered this point by stating that technological development in the steel industry would diminish job employment. This is just one of the many American industries that are supposed to benefit from tariffs. However, especially with Trump's economic policy package, it will not alleviate America's manufacturing woes.

Tariffs are not necessarily a bad policy tool to boost domestic industry– if used in a strategic matter with policy tools. The Biden administration implemented tariffs (extending many of Trump's tariffs from his first) while pushing for government investment in the economy. The CHIPS and Science Act of 2023 and the Inflation Reduction Act of 2022 brought investment into semiconductor R&D, our ailing infrastructure, and tax credits in the green industry. 

Of course, these measures weren't enough to confront the short-term problems that propelled President Trump's 2024 electoral campaign or the long-term issues of equitable income distribution and supply chain resilience. But they were a good step in the right direction for what economic policy making would be without dogmatic adherence to the "free-market" ethos and/or a protectionist and statist approach to solving socio-economic problems. 

Unfortunately, dogma has mired the Trump administration's decision-making process regarding everything related to our federal government. These tariffs, without proper federal investment or rigorous industrial policy, will cause more pain to all of us.