As part of his “Make America Great Again” election campaign, Donald Trump is calling for the imposition of 60% tariffs on goods made in China and a 20% tariff on imports from other nations. His rationale seems simple: tariffs will boost American jobs, reduce the federal deficit, cut food prices and even generate revenues to subsidize childcare. But the former president’s supposed all-purpose trade fix is fundamentally flawed.
One of the central promises behind Trump’s proposed tariffs is that they will bring back factory jobs to the US by making foreign goods more expensive and, therefore, incentivizing companies to manufacture domestically. In theory, this sounds appealing, but the reality is far more complex. Indeed, history shows that tariffs rarely lead to long-term job creation in industrial sectors. In fact, after Trump imposed steel tariffs in 2018, many US companies that relied on imported steel materials were forced to raise prices or cut jobs because the costs of raw materials skyrocketed.
