From CNBC: 2025-03-10 15:22:23

President Donald Trump touted tariffs as a job-creating force during a speech to Congress, but economists disagree, warning that tariffs could cost American jobs and lead to a lose-lose situation. The Trump administration has announced a series of tariffs on imports from China, Canada, and Mexico, as well as on steel, aluminum, copper, and lumber.

While tariffs may protect struggling U.S. industries, they also create higher input costs for other sectors, leaving them vulnerable to foreign competition. Steel tariffs, for example, raise production costs for manufacturing and other industries, ultimately costing jobs. Tariffs imposed by Trump in his first term led to retaliatory tariffs from other nations, creating a tax on exports.

Economists point to historical precedents like the Smoot-Hawley Tariff of 1930, which exacerbated the Great Depression, as evidence that protectionist policies may lead to disappointing results. Recent evidence shows that Trump’s tariffs failed to revive domestic manufacturing and actually reduced jobs in the sector. Experts suggest directing economic policy towards connecting workers to future jobs rather than focusing on protectionist measures.

Read more: Do tariffs protect U.S. jobs and industry? Economists say no