US Trade Tariffs: Why the Promised Economic Gains Haven’t Materialized

Echoes of 2018 and 2019 Tariff Strategies

To understand the consequences of the trade barriers erected by the new administration, analysts often look back at the first term of Donald Trump, according to coverage from The Conversation. During 2018 and 2019, those initial tariffs targeted approximately 300 milliards d’importations in imports, including solar panels, washing machines, steel, and aluminum.

The duties later expanded to encompass numerous products from China, India, and Europe, such as medical devices, telephones, chemical products, textiles, aircraft, cheeses, and olive oils.

White House Objectives and Economic Assumptions

In statements issued in 2025, Donald Trump assigned multiple objectives to these trade policies: rebalancing the trade balance, reindustrializing the country, and creating domestic manufacturing jobs. The administration also highlighted anticipated increases in federal revenues and emphasized the necessity of sanctioning China for practices deemed unfair.

Furthermore, the White House expressed hope that foreign direct investment would flow into the United States to bypass the new tariffs, a concept known as tariff-jumping. Donald Trump maintained that tariffs function as a tax on foreign exporters rather than domestic consumers, arguing that U.S. households and businesses would not experience price increases. While acknowledging the possibility of foreign trade retaliation, the administration minimized its effects, suggesting that U.S. counter-reprisals would strengthen the nation’s leverage in negotiations.

Widening Trade Deficits and the Strong Dollar

Economic data compiled after the 2018–2019 tariffs reveal a stark contrast with the administration’s stated goals. According to trade statistics, the U.S. trade deficit climbed from 870 milliards de dollars en 2018 in 2018 to 1 173 milliards en 2022 in 2022, and reached 1 203 milliards en 2024 in 2024.

Although imports experienced a slight dip in 2018 and a sharper decline during the COVID-19 pandemic in 2020, they quickly resumed an upward trajectory. Exports followed a similar path, though with a less pronounced increase toward the end of the period. Economists point to the strengthening of the U.S. dollar as a contributing factor, as reduced import demand for foreign currencies like the Chinese yuan, Indian rupee, and euro drove up the value of the dollar, making American goods more expensive overseas.

Evaluating Local Employment and Manufacturing Impact

Regarding domestic reindustrialization, a study by economists David Autor, Anne Beck, David Dorn, and Gordon Hanson evaluated the employment consequences of the 2018–2019 trade war across local commuting zones. Their findings indicated that the first administration’s tariffs produced no discernible positive effect on local employment levels.

Customs Collections and Federal Revenue Limits

Data from U.S. Treasury Fiscal Data shows that federal customs collections did increase following the implementation of tariffs in May 2018 and May 2019. Despite this growth, customs receipts accounted for only a minor share of total federal revenue—roughly environ 1 % en 2018 in 2018 and environ 2 % en 2019 in 2019—ranking far behind income taxes and corporate profits.

Research indicates that significantly expanding customs revenues would require imposing prohibitive duties, such as an estimated d’environ 80 % tax on imports, which would generate severe economic distortions.