President Donald Trump’s tariffs are still costing businesses money, and the impact isn’t going away anytime soon. Economists say the trade war he launched is far from over, even though he’s out of office.
Prices went up, jobs got cut, and companies struggled to keep up with global competition. Some of these tariffs—like the ones on Chinese goods and raw materials—are still in place, making it clear that reversing them is not as simple as putting them in.
Lydia Cox, an economics professor at the University of Wisconsin-Madison, studied the long-term impact of past tariffs and said businesses are still dealing with the fallout from George W. Bush’s steel tariffs two decades ago.
“The effects were really widespread,” Cox reportedly told the WSJ. Her research found that even after Bush reversed the tariffs, companies that relied on steel struggled to sell their products overseas. The damage lasted for years.
Tariffs raise costs, but industries pay the real price
Trump’s tariffs covered an enormous range of goods—everything from beer to planes to washing machines. Unlike previous administrations that imposed tariffs with clear objectives, Trump’s trade policies jumped from one justification to another.
Sometimes the tariffs were about protecting American manufacturing. Other times, they were meant to stop drugs and illegal migration. The lack of consistency made it difficult for businesses to plan, and that instability is still a problem.
Douglas Irwin, an economics professor at Dartmouth College, said past tariffs usually had a clear demand attached. For example, Ronald Reagan’s tariffs on Japanese semiconductors were designed to protect U.S. technology companies from international competition.
Nixon’s temporary tariffs in 1971 were meant to force Japan and West Germany to raise the value of their currencies. Trump’s tariffs, on the other hand, had no single goal. “The problem today is that it’s not clear what the ask is of other countries,” Irwin said.
The uncertainty made it worse for businesses. The Boston Federal Reserve estimated that Trump’s early tariff proposals increased core inflation by up to 0.8 percentage points, depending on how U.S. importers reacted. Companies that relied on foreign materials had to pay more, and those costs were passed on to consumers.
Trade wars last longer than the presidents who start them
Over the past two weeks or so, stock markets have taken a hit as investors realized Trump’s tariffs were not just a negotiating tactic, and businesses that depended on global supply chains had no way to escape the rising costs.
The administration briefly granted exemptions for Canadian and Mexican imports, but it didn’t help much. Trump himself floated the idea of imposing a 25% tariff on all goods from those countries and an additional 20% tariff on China.
His officials framed these taxes as a way to boost manufacturing and government revenue, but economists argued that those goals contradicted each other.
Christine McDaniel, a senior research fellow at the Mercatus Center at George Mason University, said American companies ended up paying for the tariffs, not foreign suppliers. “The U.S. absorbed well over half of those tariffs,” McDaniel said. “We don’t have as much pricing power as you might think.”
Some of Trump’s tariffs did bring manufacturing jobs back, but at an enormous cost. In 2018, import taxes on washing machines created about 1,800 jobs at companies like Samsung.
A study published in the American Economic Review found that those jobs cost American consumers about $1.5 billion annually—more than $800,000 per job.
Even after Trump left office, the Biden administration kept many of the tariffs in place. Jack Zhang, a political science professor at the University of Kansas, said reversing them was more complicated than expected.
“It is easier to ramp up tariffs than wind them down,” Zhang said. He explained that once industries benefit from protectionist policies, they fight to keep them. That, combined with retaliatory tariffs from other countries, makes reversing trade wars nearly impossible.
The history of American tariffs shows just how long these disputes can last. The Chicken Tax, for example, has been in place since the 1960s.
When European countries put tariffs on U.S. chicken, President Lyndon B. Johnson retaliated with a 25% tax on imported pickup trucks. That tariff is still in effect today. It helped American automakers, but it also made pickup trucks more expensive for consumers.
Another long-running trade war involves softwood lumber. The U.S. has been battling Canada over lumber imports for more than 40 years.
American tariffs at times made lumber prices so high that companies had to start importing from Chile and Austria instead. “Not only are you paying a higher price, but also the price volatility of lumber dramatically increased,” said Daowei Zhang, associate dean of research at Auburn University’s College of Forestry.
Construction companies, remodeling firms, and homeowners all suffered from the unpredictability. “People can’t make a plan,” Zhang said.
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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