The Pros and Cons of Recent U.S. Tariff Policies

The United States has returned to using tariffs more aggressively. These policies target imports from countries like China, aiming to protect U.S. industries, reduce trade deficits, and influence foreign policy behavior.

But do tariffs work as intended?

Let’s examine the current tariff strategies—what they do well, where they fall short, and whether the logic behind them holds up under scrutiny.

What Are Tariffs?

• Tariffs are taxes placed on imported goods.

• They raise the cost of foreign products for U.S. consumers and companies.

• The goal is to make domestic alternatives more competitive.

That’s the theory. The outcomes aren’t always so clean.

What’s Happening Now?

Since 2018, the U.S. has imposed multiple waves of tariffs, most notably under the Trump administration’s trade war with China.

President Biden has kept many of these tariffs in place.

New proposals are expanding tariffs to more sectors, including green energy tech and semiconductors.

[Source: Congressional Research Service, updated 2023]

Claimed Benefits

1. Protecting U.S. Manufacturing

Tariffs give domestic industries breathing room. They slow down foreign competition.

• The U.S. steel industry saw a boost after 25% tariffs on foreign steel in 2018.

• Some plants reopened, and jobs returned—at least temporarily.

But here’s the question:
Are those jobs staying, or is it a short-term win?

According to the Peterson Institute for International Economics (PIIE), job gains were minor and often offset by losses elsewhere.

[Source: PIIE, 2021]

2. Reducing Dependence on China

Policymakers argue that tariffs weaken economic ties with geopolitical rivals.

• Reducing imports from China is seen as a national security move.

• It also supports reshoring critical supply chains, especially in tech and pharmaceuticals.

This idea holds some logic. Relying heavily on a rival power for essential goods is risky.

But ask yourself:

Why not diversify supply chains rather than isolate them?

Relying less on China doesn’t require blocking China. It could mean sourcing from allies like Vietnam, India, or Mexico.

Trade data shows that while imports from China dropped, imports from those other nations surged.

[Source: U.S. Census Bureau, 2023]

3. Using Tariffs as Leverage

The U.S. uses tariffs to force other countries to change behavior:

• Intellectual property theft

• Forced technology transfer

• Unfair subsidies

That’s the idea behind “strategic tariffs.”

But the results have been mixed.

Despite heavy tariffs, China hasn’t made major concessions. Talks stall. Tensions rise. U.S. businesses remain caught in the middle.

So, where’s the leverage?

If tariffs don’t lead to change, are they just punishment?

[Source: Bloomberg, 2022]

The Hidden Costs

Tariffs aren’t free. Someone always pays.

Usually, it’s you, the consumer.

Let’s look at where the burden falls.

1. Higher Consumer Prices

Tariffs raise the price of imported goods.

Retailers pass that cost onto customers.

• A 2020 study found that the average U.S. household paid $1,277 more per year due to China’s tariffs.

• This hits low-income families hardest. They spend a larger share of their income on goods.

[Source: Federal Reserve Bank of New York, 2020]

What’s the trade-off? Protecting a few thousand jobs while raising living costs for millions?

Challenge the logic:
Does that help the broader economy, or just select industries?

2. Business Uncertainty

Unpredictable tariffs make planning harder for companies.

• Will tariffs rise again next quarter?

• Will there be exemptions?

• Should firms switch suppliers or relocate factories?

This kind of noise discourages long-term investment.

A 2022 U.S. Chamber of Commerce survey found that 40% of manufacturers delayed expansion plans due to tariff risk.

That’s economic drag—pure and simple.

3. Retaliation Hurts U.S. Exporters

Other countries don’t sit still. They strike back.

• China hit U.S. soybeans with tariffs.

• Europe targeted bourbon and Harley-Davidsons.

• American farmers saw exports collapse.

The Trump administration had to spend $28 billion in subsidies to keep farmers afloat.

[Source: USDA, 2020]

So here’s the question:
Is it really a “win” if you must bail out the victims of your own policy?

Do Tariffs Reduce the Trade Deficit?

One of the biggest claims is that tariffs shrink the U.S. trade deficit.

But data doesn’t support this.

• The trade deficit with China fell from $418 billion in 2018 to $310 billion in 2020.

• But the overall U.S. trade deficit increased during that time.

Why? Because imports shifted, not stopped.

We bought less from China and more from Vietnam, Taiwan, and Mexico.

The goal was to reduce dependency. The result was rerouting supply chains.

[Source: Bureau of Economic Analysis, 2023]

So ask yourself:
Is the trade deficit a valid target, or just a political talking point?

Are Domestic Industries Better Off?

Short answer: Some are. Many aren’t.

Let’s break it down.

Steel

• U.S. steel output rose after tariffs.

• But so did costs for U.S. carmakers, construction firms, and appliance manufacturers.

Net effect? Gains in steel, losses in downstream sectors.

Solar Panels

• Tariffs aimed to revive U.S. solar manufacturing.

• They raised panel prices and slowed solar adoption in the U.S.

The industry lost more jobs in installation than it gained in manufacturing.

[Source: Solar Energy Industries Association, 2019]

So, who benefits?

Tariffs help a few firms survive. But they don’t build a globally competitive industry on their own.

Are There Better Alternatives?

Instead of tariffs, what else can the U.S. do?

Invest in R&D and Workforce Training

• Make U.S. industries more competitive by boosting productivity and innovation.

• Germany and South Korea took this route and built strong exports without protectionism.

Targeted Subsidies

• Support strategic sectors directly, like semiconductors or clean energy, without hurting consumers.

• The CHIPS Act and the Inflation Reduction Act try this approach.

Tariffs are a blunt tool. Precision tools work better.

Why use a hammer when you need a scalpel?

What About Long-Term Effects?

Here’s where the discussion gets harder—and more important.

Institutional Damage

• Tariffs weaken trust in global trade rules.

• The U.S. has sidelined the WTO (World Trade Organization) and acted unilaterally.

That opens the door for others to do the same. Long term, it erodes systems the U.S. helped build.

[Source: WTO Annual Report, 2023]

Political Blowback

• Tariffs can spark nationalist responses abroad.

• They may fuel anti-American sentiment or push countries closer to U.S. rivals.

Tariffs aimed at isolating China may be pushing some nations closer to China.

Is that strategic success or failure?

A Skeptic’s Take

Let’s challenge the core assumptions behind current tariff policy:

Assumption 1: Tariffs protect jobs.
Reality check: They protect some while destroying others.

Assumption 2: Tariffs weaken China.
Reality check: China’s economy grew in spite of them.

Assumption 3: Tariffs help the U.S. win the trade game.
Reality check: Global trade isn’t a game. There are no clear winners.

Assumption 4: Tariffs are temporary leverage.
Reality check: They often become permanent fixtures with no clear end goal.

Questions You Should Be Asking

• Who gains the most from these tariffs, and who loses the most?

• Are these policies about long-term strategy or short-term politics?

• What does success look like?

• If tariffs don’t change behavior, why keep them?

• How much are you, the consumer, paying for this strategy?

Final Takeaways

Pros:

• Can protect specific industries

• May boost domestic production in short bursts

• Signal geopolitical resolve

Cons:

• Raise costs for consumers and businesses

• Risk retaliation against U.S. exports

• Create uncertainty and drag on investment

• Rarely achieve stated policy goals

Tariffs can work in narrow, targeted ways. But as a broad strategy, they fall short.

They might sound tough. They might feel patriotic. But if the result is higher costs, weaker alliances, and sluggish economic growth, is it worth it?