For a time in 2018, it felt like the United States had turned back the clock on free trade. The Trump administration, vowing to put “America First,” slapped tariffs on a vast array of imports – from steel and aluminum to washing machines and hundreds of billions in Chinese goods.
Years later, we’re still living with its consequences.
What tariffs were imposed and why
Trump’s first term saw the most aggressive use of tariffs by a US president in modern times. In early 2018, 25% tariffs on steel and 10% on aluminum imports were introduced under a “national security” rationale. That was just the start. Tariffs soon hit solar panels, washing machines, and by mid-2018, an escalating set of levies targeted China specifically.
By the end of 2019, more than US$380bn worth of imports—mostly from China—faced tariffs. These were justified under claims of unfair trade practices, intellectual property theft, and a massive trade deficit. The goals: pressure China into concessions, protect US industries, and “level the playing field” for American workers.
What the tariffs achieved (and didn’t)
Trump did win a partial concession. The so-called Phase One deal signed in January 2020 saw China pledge to buy an additional US$200bn in U.S. goods and services. But Beijing fell far short of its targets, fulfilling barely half the promised purchases. Structural issues around subsidies, tech transfers, and IP enforcement remained largely unresolved.
Steelmakers enjoyed a temporary lift. Imports fell, prices rose, and domestic output ticked upward. But downstream industries—those that use steel and aluminum—faced higher input costs and some contraction. Manufacturing job growth, strong in early 2018, slowed as tariff effects kicked in. The overall trade deficit didn’t shrink. By many measures, it widened.
In short, the hoped-for resurgence in US manufacturing didn’t materialise. Supply chains proved sticky. Many companies paid the tariffs or shifted sourcing to countries like Vietnam—not back to the US.
Inflation, price pressures and household costs
Were the tariffs inflationary? On specific goods, yes. Washing machine prices, for instance, rose sharply. In broader terms, estimates suggest tariffs caused a one-off increase in the price level—roughly 0.5–0.7%—costing the average US household over US$1,000. This wasn’t enough to spark runaway inflation but did add quiet pressure to household budgets.
Interestingly, inflation didn’t take off in 2018–2019, due to offsetting global trends and strong currency effects. But prices for tariffed goods stayed higher. In many cases, that increase became “sticky”—locked in by wage adjustments and supply chain changes. Once prices rise, especially on durable goods, they rarely fall back.
Retaliation and regional fallout
China and other US trading partners hit back. Chinese tariffs on US soybeans, pork, and other agricultural exports hammered the Midwest. Exports plummeted. Farmers faced a sudden loss of their biggest customer. Brazil surged in to replace the US as China’s main supplier.
The Trump administration responded with massive bailouts. Over US$28bn was distributed to farmers in 2018–19, rising to more than US$60bn by 2020. In effect, tariff revenue collected at ports was redistributed to compensate those harmed by retaliation.
Other industries weren’t so lucky. Harley-Davidson, for example, shifted some production offshore after being targeted by EU tariffs. Aerospace and auto parts exporters lost contracts. While few sectors were permanently destroyed, some lost market share they never regained.
Legacy and continuity
When Joe Biden took office in 2021, he kept most of Trump’s China tariffs in place. Some steel and aluminum tariffs were adjusted, especially with allies, but the broad tariff wall against China remained. Tariffs had become politically entrenched. Few wanted to be seen as “soft” on China.
Businesses adapted. Some benefited. Others bore the cost. For better or worse, tariffs became a semi-permanent feature of US trade policy. The initial urgency to unwind them faded, especially as strategic competition with China intensified.
Whether the tariffs fulfilled their original goals is debatable. Some industries gained. Others lost. Consumers paid more. China didn’t capitulate. And a new chapter in US–China economic separation had begun.
