Separating Tariff Facts from Tariff Fictions

A tariff is a form of tax. And like any other tax, tariffs impose economic costs that reduce our standard of living. But some talk of tariffs as though these taxes can magically raise revenue for the government while making trade fairer, citizens more prosperous, and business endeavors more productive. Do tariffs defy the laws of supply and demand and lift our standard of living?

This essay sets out to answer that question, exploring how the United States has used tariffs, reviewing theoretical and empirical research on who pays and who benefits under tariffs, and demonstrating what else happens when tariffs are imposed. It is dubious to claim that tariffs can be imposed with no economic trade-offs, and economists generally consider them to be poor tools for achieving various policy objectives. Tariffs repeatedly fail to achieve goals like increasing the number of things we produce, creating more jobs, or fostering healthy and innovative companies. Instead, tariffs tend to raise prices, reduce economic activity and efficiency, and invite foreign retaliation and domestic political dysfunction.

A tariff is a type of tax imposed on the purchase of foreign goods. It may be figured as a percentage of a good’s price, called an ad valorem tariff, or as a fixed dollar amount per good. As any tax does, a tariff raises revenue for the levying government, about $100 billion for the US government in 2022.

Tariffs are imposed to shield domestic companies and workers from foreign import competition or to generate revenue for the government. Protectionist motivations for imposing a tariff include revitalizing local industries, creating jobs, offsetting allegedly “unfair” trading practices of other nations, promoting national security, or affecting the balance of trade. Tariffs attempt to achieve these objectives by making imports cost as much or more than similar, higher-priced goods made domestically. (If domestic goods were already priced less than imports in the absence of a tariff, a new tax would be unnecessary.) Thus, a tariff discourages US consumers from purchasing imports and encourages them to buy from domestic producers instead, boosting the producers’ sales and profits.

This is not, however, the end of the story. Consumers and other businesses forced to pay tariffs or buy higher-priced domestic goods suffer from lower incomes and profits than they would have without the tariffs. This, in turn, means reduced consumer spending on other goods and services or, for companies, on worker salaries or investments. Tariffs can also lead to increased currency values, placing exporters at a disadvantage in foreign markets and thus reducing their sales and profits. Like any tax, a tariff generally leads to deadweight loss (an excess loss or burden above the amount actually paid in tax) because it decreases aggregate economic activity and incomes.

Finally, tariffs’ protectionist objectives and revenue objectives are often in tension because tariffs are only paid (and thus collected) on imports that enter the country. Raise tariffs high enough to reduce or eliminate imports (and thus benefit higher-priced domestic producers), and tariff revenue also is reduced or eliminated. Keeping tariffs low can maintain import levels and thus generate revenue but result in little protection for domestic firms. In fact, revenue considerations once limited the scope and magnitude of US tariffs (and thus of US protectionism).

The US Constitution grants Congress the power to “lay and collect” duties and to “regulate commerce with foreign nations.” The economist Douglas A. Irwin describes the US experience with tariffs in three phases: revenue, restriction, and reciprocity. From the Founding era through the Civil War, tariffs were the main source of revenue for the federal government and thus not so broad and high as to discourage imports altogether. As Irwin explains regarding tariff proposals in Alexander Hamilton’s 1791 “Report on Manufactures,” they “were not highly protectionist because Hamilton feared discouraging imports, which were the critical tax base on which he planned to fund the public debt.” Instead, “most of Hamilton’s proposals involved changes in tariff rates—raising some duties on imported manufactures and lowering some duties on imported raw materials,” and Hamilton’s Federalist party actually lost support among domestic manufacturers to more protectionist Republicans.

After the Civil War and especially after the income tax was introduced in 1913, however, the revenue check on US tariffs dissipated, and federal lawmakers gave way to protectionist inclinations. The Tariff Act of 1930, known as the Smoot–Hawley Act, significantly raised tariffs, which invited retaliation, collapsed world trade, and worsened the Great Depression. It was the last tariff act that Congress enacted and led to a fundamental shift of trade policy away from restriction and toward reciprocity.

In the aftermath of Smoot–Hawley, Congress delegated trade negotiation powers and tariff-setting authority to the president. Since 1934, the general policy of Congress and the president has been to gradually liberalize trade, including reducing and eliminating many tariffs. Accordingly, the average tariff rate across all imports fell from 19.8 percent in 1933 to below 2 percent from 2000 to 2019, as Figure 1 shows.

Though average tariff rates fell, US trade has not been unfettered. The United States still maintains high tariffs on politically sensitive products like textiles and pickup trucks, and Washington has continued to impose tariffs through administrative action. Congress has empowered the executive branch to impose tariffs under certain instances:

• if imports threaten to impair US national security (Section 232 of the Trade Expansion Act of 1962);
• if a sudden import surge has caused or threatened serious injury to a US industry or in response to foreign trade barriers or violations (Section 201 and Section 301 of the Trade Act of 1974); or
• to offset a foreign government subsidy (countervailing duties) or a foreign producer selling in the United States below certain price or cost levels (antidumping) when US industries and workers are “materially injured” by “unfairly traded” goods.

As Adam Posen, president of the Peterson Institute for International Economics, explains, over the past two decades, the American government has been increasingly insulating the economy from foreign competition and withdrawing from global trade, including through higher tariffs.

The Trump administration accelerated that trend with extensive use of delegated powers to impose new tariffs. The administration imposed Section 201 tariffs on solar panels and washing machines, Section 232 tariffs on steel and aluminum, and Section 301 tariffs on Chinese products (henceforth, 2018–2019 tariffs). Tariffs doubled to 2 percent of federal revenues, while the average tariff rate on all imports increased from 1.4 percent in 2017 to 2.8 percent in 2020. The Biden administration has retained nearly all these new tariffs.

When a country imposes a tariff on imports, the person or firm who imports the good into the home country bears the legal burden of paying the tax to the home government. But the more relevant question is who ultimately bears the economic burden (or “incidence”) of a tariff, and it may differ from the person who writes the check to the government.

Different people, domestic or foreign, might bear the economic burden, depending on multiple factors. Those include pass-through rates (how much of the tariff is “passed through” to domestic consumers) and fluctuations in currency values. Figure 2 summarizes who may pay for a tariff depending on different circumstances.

If foreign producers lower their prices to continue selling into a country after tariffs are imposed, they bear some part of the tariff via lower profits. In that case, the tariff does not pass completely through to the importing economy. But if foreign producers do not lower their prices to offset a tariff, it passes through to the importing economy in two ways: (1) the tax itself, which is paid by importers of the tariffed product to the government; and/​or (2) higher prices paid by domestic consumers to sellers of alternative (nontariffed) goods. Importers, then, face the choice of accepting lower profits or passing the higher costs on to domestic consumers through higher prices. For instance, Ford and General Motors both faced more than $1 billion in higher costs from steel and aluminum tariffs in 2018, or about $700 per vehicle produced in North America, and warned that they might be forced to pass on these higher costs to consumers via price increases on their vehicles.

Recent empirical evidence, using a variety of methods, indicates near complete pass-through of the 2018–2019 tariffs to US consumers. Mary Amiti, Stephen J. Redding, and David Weinstein found that the full burden passed through, costing US consumers and the firms that import foreign goods an additional $3 billion per month in added tax costs and $1.4 billion in deadweight loss (or lost income) as depicted in Figure 3.

For example, after the Trump administration imposed tariffs on washing machines, the price of washers increased by $86 per unit, and so did the price of dryers, by $92 per unit, because they are sold as a package. Overall, the tariffs on washing machines resulted in an aggregate increase in consumer costs of more than $1.5 billion.

Pablo Fajgelbaum and others similarly found that the tariffs were completely passed through to prices paid by US importers. Alberto Cavallo and coauthors found that tariffs on imports from China were almost fully passed through to US import prices but only partially to retail consumers, implying a reduction in retail margins as some businesses absorbed the higher tariff costs rather than passing them on. Likewise, a review from the US International Trade Commission of tariffs on steel, aluminum, and Chinese goods found evidence for nearly complete pass-through of the tariffs to US consumers. When businesses and consumers pay more for tariffed goods, they have less to spend elsewhere, which reduces demand for other goods. Combined with currency fluctuations, that means tariffs primarily affect relative prices, as opposed to the overall price level. And further, the goods that faced higher tariffs comprise a relatively small share of the goods measured in price indexes, meaning that while pass-through was complete, it had a small effect on the overall price level in the United States.

Counterintuitively, domestic exporters also share tariffs’ economic burden because a tax on imports is effectively a tax on exports. When a tariff is imposed, exporters in the home country may face retaliatory tariffs or, because many are often also importers, higher input costs—both of which make the exporter less competitive in foreign markets. Research confirms that import tariffs harm exporters: Kyle Handley, Fariha Kamal, and Ryan Monarch, for example, found that the 2018–2019 import tariffs were equivalent to a 2 percent tariff on all US exports.

Exporters’ global competitiveness may be further eroded by tariff-induced currency changes. When the United States imposes a tariff on goods from China, for example, imports fall as does the sale of US dollars in exchange for Chinese yuan. A lower global supply of US dollars pushes up the value of the dollar, which makes US exports relatively more expensive on the world market. (To take an extreme and simple example, suppose a bushel of grain sells for $10, and a buyer in China who wishes to purchase it must exchange 10 yuan for $10. Now suppose the dollar doubles in value. The buyer would have to exchange 20 yuan for $10 to purchase the same bushel of grain, making it much more expensive. Or for the bushel of grain to stay the same price in yuan in China, the US exporter would have to cut its price in half to $5.) As a result of these dynamics, tariffs can cause exports to fall, with exporters thus bearing a portion of the tariff burden.

One possible counter to the studies on the harms of tariffs is that the costs, while real, are justified by the benefits that tariffs provide to protected companies or American workers. Yet, as discussed below, corporate success stories are few and far between. A January 2024 study by David Autor, for example, concludes that the 2018–2019 tariffs failed to provide economic help to the heartland, finding that import tariffs had “neither a sizable nor significant effect on US employment in regions with newly-protected sectors” and foreign retaliation “by contrast had clear negative employment impacts particularly in agriculture.”

Furthermore, American jobs supposedly saved by import protection have come at an extremely high cost to consumers, ranging from an annual average of $256,000 per job in the 1980s to more than $800,000 per job in the 1990s (all in 2017 dollars). More recently, tire tariffs and steel tariffs have both annually cost US consumers more than $900,000 per job.

Adding insult to injury, the distributional effect of tariffs (i.e., how tariffs affect people of different income levels) tends to be regressive, meaning that tariffs impose higher burdens on people with lower incomes. In general, tariffs create a larger burden on poorer households because poorer households generally spend more money on traded goods as a share of their income than wealthier households. Exacerbating this regressive impact is the design of existing tariffs, which are systematically higher for lower-end versions of goods than higher-end versions; according to estimates from economists at the Federal Reserve Board and Harvard, within consumer goods, rates are on average 1.2 percentage points higher for lower-end versions (Table 1). Both current design and general effect cause lower- and middle-income households to bear a disproportionately larger share of the tariff burden than higher-income households.

Across the different data sources and methodologies, the main takeaway from recent empirical work is that US consumers, including business consumers and particularly poorer consumers, have shouldered the burden of US tariffs through higher prices and reduced export growth, and this burden far outweighs any economic benefits of tariffs.

Tariffs allow domestic producers to raise prices and increase profits and, in turn, potentially increase production and stem employment losses. However, the gains to domestic producers come at the expense of others in the economy.

To quantify the effects, economists use a range of models with stylized assumptions that simplify the complexity of tariffs, trade, and human nature compared to reality. In some areas within economics, the range of models and variety of assumptions can lead to inconclusive results. But when it comes to the question of whether higher tariffs improve Americans’ welfare, economists are uniquely unified against the idea (Figure 4).

From 1930, when 1,028 economists urged President Herbert Hoover to veto the Smoot–Hawley tariff bill, to 2018, when 0 percent of surveyed US economic experts answered that they agreed that US tariffs on steel and aluminum would improve Americans’ welfare (Figure 5), economic theory and empirical evidence both confirm the harms of tariffs.

Some economists look at microeconomic effects of tariffs, or how tariffs impact specific sectors of the economy. For example, looking at the manufacturing sector overall, Aaron Flaaen and Justin Pierce examined the short-run effects of the tariffs imposed in 2018. They explicitly measured and estimated how the tariffs impacted manufacturing through three channels: protecting industry output, raising prices for inputs, and subjecting exports to retaliatory tariffs. They found that even though the tariffs provided a small boost to protected firms, that was more than offset by larger drags as input costs rose and retaliatory tariffs took effect. Their findings show that the traditional channel through which tariffs are intended to boost manufacturing employment is completely offset by reduced competitiveness from retaliation and higher costs in downstream industries.

Other economists use general equilibrium models to look beyond the effect on a specific sector to answer the question of how tariffs affect the economy overall. This type of analysis captures how households, governments, private businesses, and foreign economies interact and estimates how factors like output, trade flows, and employment across the whole economy would change in response to a given policy.

International Monetary Fund researchers used a range of different general equilibrium models to estimate what would happen after a 25–percentage point increase in tariffs on all trade between China and the United States. Each model they used emphasizes different channels, but each model estimates that under the higher tariffs, China and the United States would suffer large economic losses. A 2017 US International Trade Commission report used the US Applied General Equilibrium model to estimate what would happen after removing tariffs that the United States still maintains in certain sectors, including food and agriculture, textiles and apparel, and other high-tariff manufacturing and found that while protected firms would be harmed by tariff removal, the policy would on net generate an annual average increase in economic welfare of $3.3 billion from 2015 through 2020. The Tax Foundation’s general equilibrium model estimates that a new, across-the-board 10 percent tariff on all imports, as proposed by candidate Donald Trump, would reduce the level of US gross domestic product by 0.7 percent by reducing incentives to work and invest.

Empirical research from David Furceri and others examined 151 countries from 1963 through 2014 and found that tariff increases lead to economically and statistically significant declines in domestic output and productivity, as well as increases in unemployment and inequality. Fajgelbaum and others estimated that US consumers and firms that buy imports lost $51 billion while US producers gained $9.4 billion, implying substantial redistribution from importers to the US government and protected industries.

While domestic consumers pay, tariffs are supposed to benefit other sectors of the domestic economy. Tariffs may be imposed to “generate jobs,” “revitalize industries,” or “boost production.” Their success on these grounds, however, is questionable at best.

In a survey of literature related to US trade protection from America’s Founding to the present day, covering tariffs on a wide range of industries and goods, the Cato Institute’s Scott Lincicome concludes, “In no case can it confidently be said that American protectionism was a substantial cause of American prosperity or the flourishing of protected US industries. Most often, import restrictions have been abject failures, imposing massive costs on US consumers, workers, and companies without achieving their intended objectives.” The United States has famously tried, and failed, to revive several industries with tariff protection, including shoes, softwood lumber, sugar, steel, tires, motorcycles, certain manufacturing goods, apparel, and textiles.

Import restrictions for the steel industry exemplify the failure in promoting overall production and employment. Since the 1970s, the US government has imposed hundreds of restrictions to protect steel producers, with 304 antidumping and countervailing duty orders in place as of March 2024.

Protection from the 1980s to today has consistently generated higher domestic steel prices that benefit domestic producers but cost domestic consumers. For instance, in 1984, the Foreign Trade Council estimated that additional protections under consideration would result in $1.10 billion in annual costs to US consumers at the time, $428 million of which would be gains to US producers. The implied cost–benefit ratio of higher consumer costs to potential steel jobs temporarily retained from the restrictions was $113,622 per job in 1984. University of California, Los Angeles economist Aaron Tornell analyzed how from 1970 to 1989 rising steel prices coincided with falling production and employment coupled with failure to adopt new technologies. Further, even though workers didn’t produce more, they were paid more, showing how higher prices and revenues were squandered.

And perhaps worse, protectionism encourages rent seeking behavior and discourages innovation and research and development. Analyzing protectionist steel policies from the 1980s, economists Stefanie Lenway, Randall Morck, and Bernard Yeung found that steel protection boosted lobbying efforts for less innovative firms and discouraged productive firms from engaging in research and development. They concluded that protection “confers private benefits upon lobbyers’ shareholders, senior workers, and top managers … appears to reduce returns to true innovation and encourage innovative firms to exit. These dynamic costs of protection … are potentially much more serious than the distortions shown in standard trade theory diagrams.”

Steel tariffs continued in the 2000s, leading to price increases that again benefited steel producers but cost domestic steel consumers. A May 2023 research brief from James Lake and Ding Liu found that the 2001 steel tariffs under President Bush had large, negative effects on local steel-consuming employment that grew as tariffs remained in place and that persisted even five years after the tariffs were lifted. While the tariffs had a negative impact on local labor markets that used steel, the research found no notable positive effects on local steel-producing employment. The authors note that their results “emphasize the negative employment effects of tariffs in steel-consuming industries and downplay any potential positive effects for the steel-producing industry.”

The effects could be even more prominent now. A study by Harvard University and University of California, Davis economists Kadee Russ and Lydia Cox found that steel-consuming jobs outnumber steel-producing jobs 80 to 1. Estimates indeed indicate that steel consumers lose more jobs to higher steel costs than steel producers gain. In a similar vein, an empirical review of the 2018–2019 tariffs by the US International Trade Commission (USITC) estimated that while the tariffs boosted the value of domestic steel production, they reduced production in downstream industries by a larger amount.

Steel is certainly not alone in this regard. Import protection may deliver higher profits for protected industries, but it creates disadvantages for other sectors, has a broadly contractionary effect, and thwarts important competitive forces that would benefit protected industries in the longer term. Thus, while proponents of tariffs may claim the goal is increasing production or employment, tariffs in practice are never about accomplishing that for the economy overall—their purpose is to enrich protected firms at an exorbitant price to others. In the end, even protected firms go bankrupt or are acquired by a foreign competitor (as US Steel’s 2023 purchase by Japan’s Nippon Steel again demonstrates), and the clearest beneficiary of tariffs are government officials who enjoy higher tax revenue and who curry votes by funneling benefits to politically favored industries.

Another common motivation for increasing tariffs is to reduce the trade (technically, the “current account”) deficit. While tariffs can certainly reduce imports, their effect on the trade balance is more complicated. In fact, both theory and practice show that because tariffs also decrease exports (and thus the overall level of trade), the measures do not fundamentally alter the current account balance in the long run.

This outcome may be counterintuitive but makes perfect sense to economists, almost all of whom understand that a nation’s overall balance of trade is driven not by trade policy measures like tariffs or free trade agreements but by deeper macroeconomic factors, including national saving, national investment, currency values, fiscal policy, demographics, and international capital flows. Given US and global savings and investment patterns, along with the status of the US dollar as the global reserve currency, the United States has run trade deficits for decades, regardless of tariff levels or other trade policy changes (which do not fundamentally alter the macroeconomic factors within or outside the United States).

For this reason, New York Federal Reserve economists warned in 2018 that Trump administration proposals to impose tariffs to narrow the trade deficit would reduce imports and US exports, resulting in little to no improvement in the trade deficit. In doing so, the economists cited an equal but opposite experience in China: when China lowered its import taxes, it was accompanied by higher export growth. Many other trade experts agreed with the economists’ conclusions.

The experts’ predictions proved correct. As Daniel Griswold and Andreas Freytag documented in a 2023 Cato Institute paper and as Figure 6 shows, the 2018–2019 tariffs imposed by the Trump administration and since maintained by the Biden administration “had no discernible impact on the relative size of the trade deficit”; if anything, the deficit actually increased slightly versus where it was at the end of the Obama administration. Citing some of the aforementioned studies on the tariffs’ other effects, Griswold and Freytag thus conclude that “higher tariffs did exactly what the economics literature predicted they would do: impose net economic harm without changing the current account balance.”

One reason why the trade balance was unaffected was “trade diversion,” which often occurs when tariffs on imports from one trading partner lead importers in the home country to substitute toward foreign goods that don’t face tariffs. When President Trump imposed tariffs on nearly two-thirds of imports from China, for example, trade with China fell, but US companies increased purchases from other foreign suppliers, thus increasing bilateral trade deficits elsewhere and leaving the overall trade balance mostly unchanged (Figure 7).

A 2017 USITC paper analyzed the question of whether tariffs can reduce trade imbalances by modeling a 10 percent tariff on imports from China and a 10 percent tariff on imports from all countries. The paper estimated a small, temporary decrease in the trade deficit as initially imports fell by a greater amount than exports, but over time, that effect reversed, and the trade deficit increased slightly in the long run (after 13 years). The USITC also estimated that the tariffs caused an overall decrease in investment, saving, and welfare in the United States. Similarly, a January 2024 International Monetary Fund paper found that unexpected tariff shocks tend to reduce imports more than exports, leading to slight decreases in the trade deficit at the expense of persistent gross domestic product losses—for example, they estimate reversing the 2018–2019 tariffs would increase US output by 4 percent over three years.

Overall, empirical research demonstrates that countries maintaining higher tariffs actually tend to have larger trade deficits and that tariffs have little if any direct effect on the balance of trade. Research from the International Monetary Fund examining 63 countries over 20 years and across 34 sectors provides further support: “a tariff-induced change in a specific trade balance between two countries tends to be offset by changes in bilateral balances with other partners through trade diversion, with little or no impact on the aggregate trade balance.” The Furceri and others empirical study of 151 countries similarly found that tariff increases had no significant, long-term effect on trade balances and, as theory predicts, led to real exchange rate appreciation. The authors thus conclude that “the net effects of higher tariffs on the trade balance are small and insignificant; absent shifts in saving or investment, commercial policy has little effect on the trade balance.”

In short, regardless of whether the US trade deficit is a problem, tariffs are not a valid solution.

If the hundreds of import restrictions granted to the politically powerful steel industry are any indication of US tariff history (and, as Lincicome shows in his 2017 review, they are), one drink from the protectionist trough is rarely enough. Granting tariff protection to one industry mushrooms into requests for tariff protection from additional industries, extensions when initial protections expire, and exclusions for specific firms. More recent empirical research finds, in fact, that US companies facing heightened import competition between 1999 and 2017 responded not by redoubling their commercial efforts (e.g., investing more in research and development) but by substantially increasing their lobbying for government help—a trend concentrated among less-innovative American firms. Tariffs also beget retaliatory actions from foreign countries, creating the potential for offsetting government aid. And it all creates an environment ripe for corruption and geopolitical tension.

The 2018–2019 tariffs are again instructive here. First, there was the inevitable retaliation. Governments of China, the European Union, Canada, and Mexico, as well as nations with smaller levels of trade with the United States, quickly responded with tariffs on American products. Research shows, moreover, that the retaliatory tariffs were politically motivated, targeting products that would disproportionately impact counties that supported Donald Trump in the 2016 election. And in contrast to the near-complete pass-through of US tariffs to US consumers, US exporters bore an estimated 50 percent of retaliatory tariffs because they lowered their export prices to stay competitive in the markets at issue. (They were mainly exporting agricultural commodities that would be easy for foreign importers to source elsewhere.)

This retaliation was costly—for American exporters and taxpayers. The Department of Agriculture estimated that direct export losses from the retaliatory tariffs totaled $27 billion during 2018 through the end of 2019. US market share of China’s total agricultural imports fell from 20 percent in 2017 to 12 percent in 2018, remained significantly depressed in 2019 at 10 percent, and had not recovered by February 2021. Then, to compensate politically influential US farmers for the damages, the US government gave them nearly $25 billion in direct subsidy payments (in addition to the usual US farm subsidies).

Second, the 2018–2019 tariffs raised multiple political concerns. For the tariffs on Chinese imports, for example, the Office of the US Trade Representative created a process by which domestic companies could request a special exclusion for specific products. The office reviewed exclusion requests on a case-by-case basis, that, in turn, led to a flurry of lobbying as businesses sought to make their case for exclusions. Even lawmakers questioned the agency’s ability to “pick winners and losers” through granting or denying exclusion requests. As documented in a 2021 Cato Institute paper, the exclusion process for the US steel and aluminum tariffs was similarly problematic: It was “arbitrary, erratic, and lacking in transparency” (a conclusion confirmed by the US Department of Commerce’s Office of the Inspector General), and it raised “concerns of abuse and crony capitalism.”

Third, the 2018–2019 tariffs show how one round of tariffs never satisfies. As already noted, the US steel industry has long benefited from tariff protection, yet it fiercely lobbied for more when Trump took office. After he imposed the metals tariffs, moreover, imports of downstream “derivative goods,” such as nails and wire increased, and the administration responded by expanding the scope of the tariffs to cover downstream goods, in what’s called “cascading protectionism.” American producers of other steel- or aluminum-intensive products, such as beer kegs, oil pipes, and tin cans, have also requested protection because the metals tariffs have made their goods uncompetitive versus foreign companies not facing such taxes.

Overall, trade-related lobbying has boomed since the 2018–2019 tariffs were first imposed. That should come as no surprise given the long history of tariff-related political dysfunction in the United States.

American history provides an abundance of examples of politicians using tariffs to protect domestic industry. Taken together, the examples show that tariffs do not generate higher levels of employment or production for the economy overall; they do not ensure the long-term health of the industries being protected or fundamentally alter the trade balance; and they serve not the strategic interests of the nation but the parochial interests of politicians who get to enrich preferred companies and workers by imposing diffuse and mostly hidden costs on the rest of the US economy.