Trump’s Tariff Surge Fails to Save Jobs or Lower Prices

Within hours of the U.S. Supreme Court ruling that the White House’s widespread “emergency” tariffs were illegal, President Donald Trump moved to implement 10% across-the-board tariffs under a different alleged authority. He later announced plans to raise this rate to 15% and delivered a combative response during his State of the Union address.

The White House continues to assert that Americans do not bear the costs of these policies. Below are the fallacious arguments that will soon dominate the discourse.

The first claim is optimistic: tariffs “reshore” production, raise domestic demand, push wages up and leave consumers better off. Tariffs do not conjure consumer demand out of thin air. Americans were purchasing washing machines, clothing, and steel from foreign manufacturers before these tariffs took effect. What changes is where some products are made. Production shifts from foreign manufacturers with efficiency or cost advantages to more expensive domestic producers. American producers stand to gain, except when they must pay tariffs on imported materials they need.

However, everyone who buys the product pays more. The extra $100 a family spends on a washing machine does not instead go toward the restaurant next door, repair shop, or shoe store. Real wages—what your paycheck actually buys—decline as prices for most goods rise.

Second is the zero-sum argument: making China worse off automatically makes Americans better off. This is not how economics works outside of campaign rallies. When American households buy less from China, it is true that some overseas competitors lose revenue. But what about American families losing access to cheaper goods? Or American producers losing access to cheaper materials and ingredients that make them competitive? Both countries take a hit.

Third is an attempt at a populist argument: tariffs cannot hurt lower-income Americans because the wealthy do most of the consuming. This claim misunderstands regressivity. A tax is regressive when it takes a larger share of earnings from lower-income households than wealthier ones, regardless of absolute dollar amounts. A billionaire spends more on imported goods, but this represents a small fraction of their income. Nearly every dollar earned by a working-class family goes toward essentials like clothing and household goods that are heavily import-dependent. Empirical evidence confirms the burden falls hardest on middle- and working-class families.

Fourth is the corporate-absorption argument: companies will absorb tariff costs without raising prices. Even when firms do absorb some of the hit, the money does not disappear—it is used to hire fewer workers, pay lower wages, or reduce investments. The burden simply shifts to consumers.

These objections are not hypothetical; they are backed by data. The Federal Reserve Bank of New York recently found that American businesses and consumers absorbed nearly 90% of the economic burden from the 2025 tariffs. Their analysis tracked transaction-level import prices and confirmed that higher tariff rates directly increased what U.S. importers paid.

The bottom line is that foreign exporters do not lower prices to offset tariffs, corporations do not quietly absorb these costs, and the burden is passed on to consumers—exactly as economic theory predicts. Job creation remained modest in 2025, and manufacturing employment continued to decline. Any current economic growth is driven by computer and electronic investments, which happen to be the biggest sectors exempted from tariffs.