Trump’s Tariffs

Tommi Johnsen, PhD | Advisory Board

Imagine you're at a dinner party and someone says, "Let's talk tariffs!" Eyes glaze over; forks pause mid-air. But what if the tariffs in question shaped markets, raised grocery bills, and even reshuffled global diplomacy? Welcome to the saga of Trump's tariffs—policies as controversial as pineapple on pizza, and equally hard to digest.

In this piece, we'll unpack how Trump's tariff experiment from 2018 through 2020 reshaped economic thinking, what succeeded (spoiler: not much), what flopped spectacularly, and what lessons future policymakers might glean—assuming anyone still wants to mention tariffs at dinner parties again.

A Quick Refresher Course

When President Trump famously tweeted in 2018, "Trade wars are good, and easy to win," economists everywhere groaned audibly. Trump's administration imposed hefty tariffs starting in March 2018 on steel and aluminum, and later extensive tariffs on Chinese imports, aiming to rejuvenate U.S. industries, correct trade deficits, and assert national security.

Fast forward to 2023–2025, and the numbers rolled in as follows:

Did manufacturing surge back to American shores? Not really.

Did the trade deficit vanish?

Not even close.

Did consumer prices rise?

Unfortunately, yes—But let's not get ahead of ourselves—let’s explore each point.

The Good, sort of…

Even critics grudgingly admit a few "wins":

Steel Sector Boost (Temporarily, 2018–2019): American steel mills briefly experienced a revival soon after the tariffs in 2018. Employment ticked up, factories hummed. Unfortunately, like a caffeine high, the boost didn't last beyond 2019.

Negotiating Leverage (USMCA signed 2018, effective 2020): Some argue Trump's tough stance nudged Mexico and Canada into a renewed trade agreement (USMCA), signed in November 2018 and taking effect in July 2020, including stricter labor standards and better terms. It wasn’t subtle—think diplomatic sledgehammer—but it got results.

These limited wins, though real, largely paled in comparison to broader consequences.

The Pain

Now, here's where reality checks cashed in, especially evident by 2022–2024:

Consumer Pain: Americans bore roughly 90–100% of tariff costs through higher prices, confirmed by multiple studies between 2019 and 2021. Inflationary pressures trickled down everywhere—from washing machines to cars and clothing.

Supply Chain Musical Chairs (2019–2023): Imports from China indeed declined by around 2019–2020—but simply shifted elsewhere through 2023. Vietnam, Mexico, and Taiwan stepped in.

Trade Deficit Irony (2020–2024): Tariffs aimed to slash the trade deficit but, ironically, the deficit widened noticeably from 2020 onward. Turns out, trade deficits hinge more on American spending habits than tariff walls—a sobering reality for policymakers.

Expert Consensus: What Should Have Happened Instead?

While the tariff strategy swung broadly—and missed—economists and institutions offered refined solutions particularly highlighted between 2022 and 2025:

We should have had Multilateral Diplomacy: Experts stress joining or forming international trade agreements—think TPP or RCEP, the latter coming into force by 2022 without U.S. participation. America sitting out trade pacts is like skipping class and expecting to pass the final exam.

We should have Targeted Industrial Policy: Rather than slapping tariffs indiscriminately, targeted subsidies (CHIPS Act passed 2022, Inflation Reduction Act passed 2022) nurtured vital industries without inflating consumer costs.

We should have Supported Workers: Programs like Trade Adjustment Assistance (TAA), which expired in July 2022, helped retrain displaced workers. Its lapse prompted renewed calls in 2023–2024 for a robust safety net.

We should have been Realistic about the Macroeconomy: Trade imbalances stem from spending habits, budget deficits, and saving rates—not trade barriers. The IMF consistently emphasized in 2024 that tariffs can't correct these deeper issues.

We should have Participated in the WTO: The World Trade Organization, despite recent paralysis from 2019 onward, historically provided a rule-of-law approach. Reviving its functionality post-2022 rulings against U.S. tariffs is seen as superior to unilateral tariffs—like using a referee rather than starting a brawl.

We should have used Selective tariffs to counter specific Threats: Even original tariff critics have slightly adjusted views amid geopolitical realities—especially evident by 2025 regarding China. Strategic considerations now overshadow pure economic logic. Figures like Robert Lighthizer in 2025 argue for selective tariffs to counter specific threats—like critical minerals or national defense products—though broad tariffs remain largely discredited.

Humorously put, blanket tariffs are the "spray and pray" of economics—randomly expensive and seldom hitting the intended target. On the other hand, targeted tariffs are more like precision-guided economic missiles—still destructive, but at least strategic.

Final Takeaways: Lessons from Trump's Tariffs

2018–2025

The tariff experiment from 2018 to 2025 taught us clear lessons:

Broad tariffs rarely solve complex economic issues.

Strategic policy beats simplistic solutions.

Cooperation yields better results than confrontation.

Humorous takeaway? Tariffs are like tequila shots—briefly satisfying, briefly popular at the beginning , but with painful aftermaths.