Silke Mayr Donald Trump’s proposed tariff increases aim to protect U.S. manufacturers but could also raise consumer prices and fuel inflation.
Protection for U.S. Manufacturers
President-elect Donald Trump plans to revive American manufacturing by raising tariffs on imported goods. His goal is to make U.S.-made products more competitive. Supporters, especially manufacturers competing with low-cost imports, view the tariffs as beneficial. However, economists warn that higher tariffs could harm the economy by driving up inflation, interest rates, and consumer costs.
“It does provide some level of protection for manufacturers,” said Gary Schlossberg, global strategist at Wells Fargo Investment Institute. “However, depending on the sector, inflation could offset some of the advantages.”
During Trump’s first term, he imposed tariffs on products like solar panels, washing machines, and certain metals. President Joe Biden kept many of these tariffs and added new ones on Chinese goods like electric vehicles and semiconductors. Trump now proposes higher tariffs—ranging from 60% to 100% on Chinese imports and up to 20% on other imports.
“We’re going to lead an American manufacturing boom,” Trump said during a September speech in Georgia. “When foreign companies have to pay tariffs to sell here but have an incentive to build in America, they’re going to come roaring back.”
Some U.S. manufacturers share Trump’s optimism. Drew Greenblatt, president of Marlin Steel, expects to double his 115-person workforce if the proposed tariffs take effect. He believes higher tariffs will help him win back jobs lost to cheaper Chinese suppliers. “This will be very good for American workers,” Greenblatt said.
A study by the Coalition for a Prosperous America suggests a universal 10% tariff could create 2.8 million U.S. jobs. Scott Paul, president of the Alliance for American Manufacturing, supports the idea of escalating tariffs to reduce reliance on China. “If we want to reduce our economic reliance on China, this is an important step forward,” he said.
Inflation and Consumer Cost Concerns
The downside of Trump’s tariff plan is the potential rise in consumer prices and inflation. Companies like Autozone and Stanley Black & Decker have already announced plans to pass on increased costs to customers.
The Peterson Institute for International Economics estimates that Trump’s proposed tariffs would cost the average American household more than $2,600 annually. The National Retail Federation reports that tariffs could reduce U.S. consumers’ purchasing power by $46 billion to $78 billion each year. For example, a $50 pair of athletic shoes could rise to $64, and a $2,000 mattress set could increase to between $2,128 and $2,190.
Matt Bigelow, president of Vermont Flannel, worries about inflation’s impact on his business. “If tariffs lead to higher consumer prices, that would definitely be a problem,” he said. His business depends on imported fabric, and rising costs could affect his bottom line.
Stephen Liquori, CEO of Goodwear USA, believes tariffs could boost competitiveness for domestic apparel makers but acknowledges the added costs to consumers. “There are many things we can’t make or don’t make here, and probably never will,” Liquori said. “We live in a global economy, and we can’t make everything in America.”
Bayard Winthrop, founder and CEO of American Giant, supports tariffs as a way to rebalance trade. However, he prefers a gradual increase rather than a sudden hike. “If Trump imposed a 20% tariff across the board from day one, that would be disastrous,” Winthrop said. He believes tariffs could help strengthen the U.S. middle class by creating more factory jobs. “There will be some cost increases—that’s the price you pay—but the benefit is that it will help rebuild industrial capacity in the U.S.,” Winthrop added.
While tariffs may boost American manufacturing, they also pose risks to the broader economy. Rising consumer costs and inflation could offset the intended benefits, leaving both businesses and consumers to bear the burden.