“Trump’s tariffs, framed as industrial policy to reindustrialize the country, protect workers, and lower prices. Instead, tariffs have quietly consumed much of the manufacturing sector’s profits. This is unsurprising. Most U.S. imports are inputs used to make American goods. Tariffs, therefore, are taxes on American manufacturing.
Empirical work by the Kiel Institute shows that foreign exporters absorb only a trivial share of the cost. Roughly 96 percent of the burden is passed to American buyers. U.S. households and businesses—not foreign firms—overwhelmingly covered the roughly $200 billion in customs revenue collected in 2025. Companies we import from responded not by cutting prices but by shipping fewer goods to the U.S. As Kiel economist Julian Hinz put it, the tariffs amounted to an “own goal” that raised costs, compressed profits, and weakened the very industries they were meant to protect.
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Tariffs did not restore competitiveness or pricing power. They jacked up costs and made American production less attractive at the margin.”
“new data has emerged from Canada showing the near-catastrophic consequences to American alcohol manufacturers from President Donald Trump’s tariff wars. Yet despite clear signs that his tariff policies are backfiring, the president keeps doubling down.”
“the trade deficit increased—not decreased—by nearly 37 percent in November, the most recent month for which data are available. Through the first 11 months of 2025, the trade deficit was 4 percent higher than it had been in 2024. That is literally the opposite of what Trump is claiming.
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“tariffs led to both rapid and gradual retail price increases.” The study found that “prices began rising within days of the March announcements and continued to increase steadily over subsequent months,” and also that “imported goods rose roughly twice as much as domestic goods relative to pre-tariff trends.”
There is no getting away from this fact: tariffs are pushing prices higher. The Harvard Business School, Trump’s favorite source on the matter, recently noted that prices for imported goods are up 9.7 percent from their pre-tariff trends, while domestic prices are up 4.4 percent. Those increases have added an estimated 1 percentage point to inflation as measured by the consumer price index.
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Trump repeatedly backed down and eased tariff threats in the face of negative shocks from both the stock market and the bond market. The “Liberation Day” tariffs announced on April 2 were postponed a week later after a huge stock market sell-off, and those that were later imposed were at lower rates. A threatened 130 percent tariff on Chinese goods never materialized. No wonder “TACO”—”Trump Always Chickens Out”—entered the political and financial lexicon last year.
As the Yale Budget Lab’s data show, Trump raised the average U.S. tariff rate from less than 3 percent to more than 25 percent with his Liberation Day tariffs and other moves in the first half of 2025. But those rates declined in the second half of the year and settled around 17 percent. That’s still very high, but not as high as it could have been—so it makes sense that the consequences were less severe.”
“Prime Minister Mark Carney is opening the door to more imports of electric vehicles from China with expectations the olive branch will lead to “considerable” Chinese investment in Canada’s auto sector “within three years” — risking potential blowback from Washington.
The move comes as Carney and Chinese President Xi Jinping chart a new era in Canada-China relations and diversify trade ties in response to U.S. President Donald Trump.”
“here’s the most important thing about free trade that Trump fails to grasp: It is voluntary and consensual.
Rolling into Greenland with guns blazing—or making enough threats that Denmark eventually hands the island over to avoid that possibility—is the exact opposite of that. Trump’s centralized, nationalistic view of the world has no room for individuals or their consent. What do the people of Greenland want? What do the people of Denmark want? Heck, most Americans are not very keen on the idea of their government seizing Greenland. It’s not quite accurate to say that no one wants this—some very powerful people unfortunately do—but this would be something that the U.S. government would be doing against the will of most of the individuals involved in the transaction. That should matter—a lot.
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it is encouraging to see that the Trump administration is putting together an offer that will reportedly be presented directly to the semiautonomous government of Greenland. The Economist reports that the deal includes giving Greenland the same status as the Marshall Islands and some other small Pacific islands.
The people of Greenland have the right to vote on their own future. If Trump’s deal is accepted, then Denmark (and others) should stand aside. But it certainly seems like that deal would have had a better chance of being accepted without all the bellicosity that has gone along with it.
Again, one of the glorious things about free trade is that no one points a gun (or the whole U.S. military’s terrifying arsenal) at you to make a deal happen. Individuals buy and sell things when and how it makes sense for them to do it. Yes, it is impossible to apply that logic to every aspect of international geopolitics, but presidents ought to nudge the world toward more trade and less war whenever possible. Trump is doing the opposite.”
The US is in its weakest position compared to China. The US’s global trade war makes it less able to threaten China with a coalition of countries working together to counter it economically, and the US’s trade war with China revealed America’s severe weaknesses, which is why the US keeps backing down when the bilateral trade war reaches extremes. China was starting to understand and respond to a more coalitional strategy when that got blown up with a change of president.
The uncertainty of Trump’s tariffs have hurt small businesses and people who buy from them. If people can’t be sure how much something will cost, sometimes they just hold off on that economic activity.
The Chinese Communist Party refuses to buy other countries’ agricultural goods when those countries do things China doesn’t like. You offend the emperor, your farmers pay the price.
Chinese electric vehicle maker BYD makes everything in-house, which makes it more efficient. China also has much cheaper labor than the US, and heavy governmental subsidies.
“From January through September, the most recent month for which U.S. Census Bureau trade data are available, the U.S. imported $1 trillion more in goods than it exported. This is a $118 billion jump compared to the goods trade deficit that the U.S. ran from January to September 2024. (Likewise, the overall trade deficit, which includes services, increased by $113 billion.)
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Recently published data from China’s General Administration of Customs show the Chinese goods trade surplus has increased since Trump took office. From January to September, China exported $875 billion more goods than it imported—a $185 billion jump vs. the same time period in 2024.
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Fortunately for consumers, these macroeconomic statistics are meaningless. You run a trade deficit with your grocery store, I run a trade deficit with McDonald’s, good little boys and girls run a trade deficit with Santa Claus, and we’re all better off for it. As as the economists Daniel Klein and Donald Boudreaux have put it, a trade deficit is equivalent to running a surplus on current stuff.
Likewise, as countries get richer, their labor markets transition from agriculture to industry and then to the service sector. Declining manufacturing employment as a share of overall employment is a sign that Americans are richer, not poorer, than our ancestors.
Trump’s targeted metrics are meaningless as proxies of prosperity. But the fact that his protectionist policies are failing to achieve their stated goals shows just how flawed they—and their justifications—always were.”
“Some $1.6 trillion in annual imports are subject to the tariffs, while at least $1.7 trillion are excluded, either because they are duty-free or subject to another tariff, according to a POLITICO analysis based on last year’s import data.
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In an interview with POLITICO on Monday, Trump said he was open to adding even more exemptions to tariffs. He downplayed the existing carve-outs as “very small” and “not a big deal,” and said he plans to pair them with tariff increases elsewhere.
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In addition to the exemptions from Trump’s reciprocal tariffs, more than $300 billion of imports are also exempted as part of trade deals the administration has negotiated in recent months, including with the European Union, the United Kingdom, Japan and more recently, Malaysia, Cambodia and Brazil. The deal with Brazil removed a range of products from a cumulative tariff of 50 percent, making two-thirds of imports from the country free from emergency tariffs.”
An unstrategic mishmash of tariffs is not good for the economy.