| Tariff rate | Employment | |
| 2025 | 15.3% – ~80.0% | 0 jobs |
| 2024 | 5.3% | 0 jobs |
* Rates now include the 5.3% MFN tariff, plus a series of “emergency decree” rates including (i) a 10% worldwide tariff, (ii) country-by-country rates varying from 15% to 30%, (iii) frequently shifting tariffs on Chinese-made toasters, and (iv) a “national security” tariff of 50% on the value of any copper, steel, or aluminum parts and components. The (iv) part makes actual rates vary by model as well as country, and are hard even for CBP line officers to assess.
Why did manufacturing employment turn down last year? An illustrative snapshot-in-miniature –
Then-Senator J.D. Vance in July of 2024: “We believe that a million cheap knockoff toasters aren’t worth the price of a single U.S. manufacturing job.” Putting an arithmetical gloss on this a few months later, DC-based tariff proponent Oren Cass used a hypothetical 10% tariff on Chinese-made toasters and a consequent price increase from $30 to $33 to argue that (a) higher tariffs would only modestly raise toaster prices, and (b) a large social and economic benefit would offset this extra cost:
“Damage is done when a consumer who would have benefited from a $30 toaster chooses not to buy one for $33. A second cost appears as consumers switch to domestic options that are more expensive. The consumer who buys the $32 toaster made in America pays the extra $2, but the government collects no extra revenue. Still, the share of the $32 purchase price that would once have gone to a Chinese factory and its workers now goes to an American firm and its workers instead. It pays American taxes and supports American families in American communities.”
Our own look in September had taken a different view. Setting aside the cost – across the full range of consumer spending on physical goods, the $2-per-toaster price increase would reduce average family purchasing power by about $2,000 – the claim that a 10% tariff would mean more U.S. toaster-manufacturing didn’t look realistic. At that time, no U.S. companies were making home pop-ups at all back then, though some were making large mass-production toasters for hotels and restaurants. The example of successful high-end pop-up makers in three peer countries — Dualit in the U.K., Italy’s Milantoast, and Japan’s Mitsubishi TO-ST1-T — suggested that a 10% tariff wouldn’t change that, and toaster prices would likely have to go somewhere around $300 before U.S. firms would go back to making pop-ups.
More fundamentally, the premise of a “10% tariff increase on toasters” wasn’t right, since what the Trump/Vance campaign was pitching at the time (and its administration successors have implemented since) was not a toaster or appliance-specific policy, but a general tariff increase also applying to the metals, heating elements, screws, plastic buttons, electrical wiring, etc., manufacturers need to make them. Our conclusion then:
“To get the spectacular ten-fold price-hike that sustains super-toaster making in Japan, Italy, and the UK, you’d need a 900% tariff or some equivalent policy. (Or, if you need only a five-fold price jump to make less impressive appliances profitable, 400%.) In fact, the additional Trump/Vance tariffs on metals, wiring, buttons, plastics, and other inputs would make U.S.-based toaster-making — including for currently successful producers like Holman Star — harder, not easier. The differentially higher tariff on Chinese-made pop-ups might push some into Vietnam or the Philippines, or possibly Mexico, but that would be the end of it.”
Sixteen months later, abstract arguments on hypothetical policies have been joined by real-world data and experience. Here’s what they say:
Policy: The 5.3% toaster tariff in the Congressionally authorized “MFN” tariff system (HTS 851672) still exists, but the Trump administration tariff decrees have put a sort of carousel of shifting rates on top of it. A rundown:
Note: At this point in early April, Howard Lutnick, the Commerce Secretary, predicted an “army of millions and millions” of Americans would be taking assembly-line jobs turning screws in appliance and consumer electronics factories.
Extremely complicated, but the basics are a higher worldwide tariff and an especially high one on Chinese-made stuff. What’s happened since? At least so far, our mid-2024 guess at what the real-world impact might be looks extremely close to the real-life experience. Here’s the data:
1. Higher costs for families: A Cleveland Fed study of tariff impacts suggests that the various decrees have hiked the prices of tariffed goods by about 6.6%, and that the price of locally produced substitutes has gone up by about 3.8%. So, in Mr. Cass’s case of a toaster previously costing $30, the family will very likely pay $2 more.
2. Small toaster production shift: The spikes and volatility in China policy have encouraged some production shifts, with a few toaster-makers moving assembly from China to Malaysia last summer. By November, imports of toasters had dropped a bit, but China still accounted for 95% of toaster sourcing, with Malaysia at 4%. We were slightly off, having guessed at Vietnam and the Philippines as the likely beneficiaries. Not terrible guesses – the differential China tariff has pushed a lot of microwave and personal computer assembly to Vietnam, and the Philippines has picked up some vacuum cleaners – but Malaysia seems to have the toaster-making advantage.
3. No change in U.S. industry and manufacturing employment trending down: No U.S. firm is making pop-ups, so Mr. Vance’s hypothetical guy hasn’t found a toaster job. Nor, on a larger scale, has anyone enlisted in Mr. Lutnick’s ghostly screw-turning army. To the contrary, with higher tariffs on industrial inputs like the metals and wiring, fewer Americans are turning screws on production lines now than were a year ago. Per the Bureau of Labor Statistics, overall U.S. manufacturing employment dropped by 108,000 last year, with home appliance production shedding 2,600 jobs and consumer electronics shedding 800 more.
PPI’s four principles for response to tariffs and economic isolationism:
Data:
Lending Tree’s chocolate-price survey.
Then:
Then-Sen. Vance’s toaster dream.
PPI on the $300-per-toaster cost it likely implies.
… and Mr. Cass’s rosier view.
Now:
Harvard Price Lab tracks the prices of consumer goods subject to new tariffs.
And per the Financial Times (subs. req.), tariff carousel continues to turn, as Trump administration officials scramble to dial back the August 19 rules on “steel and aluminum derivative products”:
“Donald Trump is planning to scale back some tariffs on steel and aluminium goods as he battles an affordability crisis that has sapped his approval ratings … [Anonymous FT sources] said trade officials in the commerce department and US trade representative’s office believed the tariffs were hurting consumers by raising prices for goods such as pie tins and food and drink cans.”
Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.
Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.
Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.
Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.
