Steel, Soybeans & Security: The Debate on Tariffs Continues
March 14, 2025 by
On February 25, President Donald Trump announced that new tariffs on goods from Canada and Mexico would go into effect on March 4.1 President Trump revived the use of tariffs in 2018, ending seven decades of emphasis on free trade economic policies. Since 2018, both Presidents Trump and Joe Biden have enacted several major tariffs, significantly impacting worldwide trade.2
Tradeoffs of Free Trade
Tariffs were historically used to protect domestic businesses from imports (goods bought from other countries). Once common in overseas trade, tariffs began disappearing after World War II in favor of free trade agreements. Removing tariffs allowed Americans to buy imports at low prices.3 Imported products that were cheap to make and easy to ship quickly replaced more expensive American-made goods.4 Although consumers benefited from low prices, American manufacturers couldn’t keep up. Communities across the country suffered as local factories closed and residents lost their jobs.5
One way foreign countries keep costs down is by tolerating poor working conditions and low pay. To cut prices even more, some foreign governments also spend taxpayer dollars supporting major industries, sometimes spending less on education or infrastructure.6 The difference in business costs can be staggering. For example, American minimum wage laws require businesses to pay employees anywhere from three to ten times more than what must be paid to workers in China.7 Consequently, many American companies moved their factories overseas to lower manufacturing costs and pass those savings to their customers.
How Do Americans Feel About Tariffs?
Groups that have supported recent tariffs include labor unions, human rights activists, and communities hurt by free trade. Supporters argue that tariffs help American businesses compete with cheaper imports made with unfair or inhumane business practices.8 Additionally, President Trump has declared that the U.S. trade deficit threatens the economy. A trade deficit occurs when a country imports more goods than it sells to foreign buyers. In 2016, the year before President Trump took office for the first time, the trade deficit was $481 billion.9 Furthermore, leaders in both political parties have supported tariffs; not only did President Biden continue many Trump-era tariffs but he enacted additional tariffs targeting China.10
National security experts also caution that imports are a serious threat to government secrets and intellectual property. Some imported goods have compromised sensitive data with hidden programming, and importing critical resources like energy or steel puts the United States in a vulnerable economic position.11 Tariffs can help American industries capture consumer spending, allowing them to grow. A strong manufacturing sector protects the economy from global shortages.
In contrast, most economists argue that tariffs harm Americans.12 Businesses simply raise prices on imported goods, leaving consumers without cheaper alternatives. Americans buy less, and the economy slows. Furthermore, countries have retaliated by enacting their own tariffs on American goods. For example, after tariffs went into effect in 2018, Chinese officials targeted Midwest farmers by implementing high tariffs on American soybeans and shifted soybean trade to Brazil. In the years since, American farmers have needed billions of dollars in federal aid to recover from the loss in revenue.13 Opponents also point out that tariffs did nothing to balance trade, as America’s trade deficit has more than doubled in the last seven years.14 Currently, economists predict that the new 2025 tariff proposals will increase inflation; consumers will pay more, and businesses will suffer.15
Support for tariffs among some groups of Americans has grown, especially among Republicans and independents living in areas where decades of free trade devastated the local economy. However, research indicates that tariffs have hurt Americans’ wallets and cost over 170,000 jobs over the last seven years.16 If tariffs are harming the economy, why hasn’t support declined? Polling indicates that opinions on tariffs, just as on other issues, are based on a combination of values, not just data points or dollars—an important consideration in policy discussions.
Discussion Questions
- What might make an American industry vulnerable to competition from imports?
- In your opinion, what is the greatest benefit that tariffs offer industries or the economy? What is the greatest drawback of tariffs?
- Should the United States continue using tariffs? Why or why not?
As always, we encourage you to join the discussion with your comments or questions below.
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Sources
Featured Image Credit: https://images.unsplash.com/
[1] CNBC: https://www.cnbc.com/2025/02/24/trump-says-tariffs-on-canada-and-mexico-will-go-forward.html
[2] CNN: https://www.cnn.com/2024/09/13/politics/china-tariffs-biden-trump/index.html
[3] PBS: https://www.pbs.org/newshour/economy/trump-favors-huge-new-tariffs-how-do-they-work
[4] National Bureau of Economic Research: https://www.nber.org/system/files/chapters/c13861/c13861.pdf
[5] New York Times: https://www.nytimes.com/2024/09/03/magazine/nafta-tarriffs-economy-trump-kamala-harris.html
[6] George Washington University Law: https://studentbriefs.law.gwu.edu/ilpb/2021/10/28/fast-fashion-getting-faster-a-look-at-the-unethical-labor-practices-sustaining-a-growing-industry/
[7] Stanford Review for Economic Policy Research: https://siepr.stanford.edu/publications/policy-brief/low-wage-earners-hit-hardest-trade-china
[8] Business and Human Rights Resource Center: https://media.business-humanrights.org/media/documents/files/documents/Final_Blog_Post_Tariff_Act_March_2020_002_0.pdf; Reuters. https://www.reuters.com/world/us/us-lawmakers-take-aim-chinas-trade-practices-2025-02-24/
[9] The Fulcrum: https://thefulcrum.us/governance-legislation/trumps-trade-deficit
[10] CNN: https://www.cnn.com/2024/09/13/politics/china-tariffs-biden-trump/index.html
[11] BBC: https://www.bbc.com/news/world-asia-china-64206950
[12] PBS: https://www.pbs.org/newshour/economy/trump-favors-huge-new-tariffs-how-do-they-work
[13] University of Illinois, Farm Policy News: https://farmpolicynews.illinois.edu/2025/02/farm-income-to-increase-in-2025-thanks-to-federal-aid/
[14] Brookings Institution: https://www.brookings.edu/articles/more-pain-than-gain-how-the-us-china-trade-war-hurt-america/
[15] USA Today: https://www.usatoday.com/story/money/2025/02/16/trump-tariffs-inflation-economy-impact/78398446007/
[16] Massachusetts Institute of Technology, Department of Economics: https://economics.mit.edu/sites/default/files/2024-01/Help%20for%20the%20Heartland%20-%20The%20Employment%20and%20Electoral%20Effects%20of%20the%20Trump%20Tariffs%20in%20the%20United%20States.pdf
