The Case for and Against the Trump Tariffs

President Trump is calling April 2 “Liberation Day” as his most wide-ranging tariffs take effect. Supporters see this as a long-overdue effort to rebuild American industry and combat unfair foreign trade practices. Critics argue it will lead to higher prices, slower growth, and rising tensions. 

Here is the case for – and against – significantly increasing tariffs. 

The Case For Tariffs 

 Supporters argue tariffs are necessary to: 

• Rebuild America’s manufacturing industry after decades of offshoring and industrial decline, 

• Reduce dependence on foreign supply chains, especially in strategic sectors like autos and tech. 

• Hold countries with unfair trade policies – like China – accountable. 

Three key points they cite: 

American manufacturing needs revitalizing. 

• Since the second quarter of 1976, the United States has had a trade deficit – buying more goods than we sell to other countries – in every quarter except one. 

• According to the White House, the U.S. ran a $93.5 billion trade deficit in auto parts last year. 

• Manufacturing employment reached an all-time peak of 19.6 million in 1979 and has trended downward ever since. 

• A White House fact sheet notes that employment in auto parts manufacturing is down 34% since 2000 – a loss of 286,000 jobs. 

Tariffs are already spurring investment in the U.S. 

• Hyundai is building a $5.8 billion steel plant in Louisiana to supply U.S. auto factories. 

• Honda is moving Civic hybrid production from Mexico to Indiana to avoid tariffs. 

• Apple is planning to produce AI servers in the U.S. and hire 20,000 workers, reportedly to qualify for tariff relief. 

Higher prices from tariffs help us in the long run. 

• As economist Oren Cass notes, higher prices consumers pay from tariffs go to the U.S. Treasury, not foreign governments. 

• That revenue can help reduce borrowing, fund infrastructure, or offset other taxes. 

• And when consumers shift to U.S.-made goods, that spending stays in the American economy, supporting local jobs and tax bases. 

The Case Against Tariffs 

Critics argue that tariffs: 

• Act as a tax on American consumers, raising prices across the board, and; 

• Fail to bring back most of the jobs lost in manufacturing, which were largely eliminated by automation – not offshoring.

Three key points they cite: 

Tariffs raise costs for American families. 

• Economists at JP Morgan estimate tariffs from President Trump will reduce U.S. GDP growth by 0.5 percentage points. 

• That translates to about $1,000 per household per year. 

• The 25% tariff on autos could raise car prices by an average of $6,000. 

Tariffs provoke costly retaliation. 

• In 2018, China imposed tariffs on $22.5 billion worth of U.S. agricultural exports in response to US tariffs. 

• The EU, Canada, Mexico, India, and Turkey also imposed duties on billions in U.S. exports – from wheat to whiskey to motorcycles. 

• These actions hurt American farmers and exporters and disrupt global supply chains. 

• China, Japan, and South Korea – three of the 12 largest economies in the world – have announced that they will coordinate a response to the latest round of tariffs. 

Tariffs do not bring back lost jobs. 

• Of the 5.6 million factory jobs lost between 2000 and 2010, 4.5 million were eliminated by automation and productivity gains, not offshoring. 

• From 1979 to 2018, U.S. manufacturing output more than doubled, even as employment fell by a third, according to a study by JP Morgan. 

Which side do you come down on?