It’s not as though we couldn’t have seen it coming. Section 4.26 of the Heritage Foundation’s Project 2025 made the case for tariffs on imported goods. The document argued that tariffs will force U.S. companies to onshore manufacturing.
Trump’s style of threatening and coercing U.S. trading partners with high tariffs has increased the toxicity of trade policy. This has all made for a rough start, with initial tariff announcements roiling the stock and bond markets and stoking consumer fear and uncertainty.
But now, two things have become clear. First, the Trump approach to tariffs has confused companies and the financial markets. Since March, employment has plummeted in industries with increased exposure to higher tariff-related costs. Second, and more important, the price of the chaos has come due, and it’s being paid largely by working Americans.
The trade wars reveal just how much Trump has sold a bill of goods to his political base. Tariffs drive up prices to U.S. consumers, both directly and indirectly. Tariffs on imported finished goods, and components that are used in domestic manufacturing, are passed on to consumers directly through higher prices, as we’ve seen with coffee. Tariffs also stifle competition from abroad by making imports more expensive. This loss of competition can spur domestic price increases, as we’ve seen with tariffs on imported solar panels.
