Pros and cons of tariffs
As Trump imposes tariffs on cars from overseas, here are the arguments for and against duties

Donald Trump has said he will impose a 25% tariff on all cars and some automobile parts that are shipped into the US. The tariffs will also apply to vehicles from American brands whose cars are assembled outside the country.
The aim of the measure is "to bring car factories" to the US, said The New York Times, "but the tariffs could disrupt supply chains for carmakers and raise costs for consumers".
They will kick in on 2 April – a day Trump has dubbed "Liberation Day". The president is also expected to unveil other industry-specific tariffs, which might include semiconductors and pharmaceutical drugs. Trump "has long argued that the US is being cheated by its trading partners and that tariffs are the best remedy", said The Guardian.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Pro: increases government revenue
Tariffs are essentially another form of tax and as such generate revenue for governments. Trump has claimed tariffs created "vast wealth for our country" and "will pay off our debt and MAKE AMERICA WEALTHY AGAIN!"
A quick look at the data behind this claim "tells a compelling story", said Sky News' economics editor Ed Conway. Indeed, "for nearly all of the 19th century, tariffs imposed on goods imported into America provided more than half the government's revenues."
Yet as a source of revenue relative to the size of today's global economy, income from tariffs is "modest", said the Council on Foreign Relations.
Con: impact on consumers and economy
One of the "most immediate impacts of tariffs is a rise in consumer prices", said EV Magazine. Studies by the National Bureau of Economic Research on Trump's first term suggest "most of the economic burden" of increased tariffs "was ultimately borne by US consumers", BBC Verify said.
Significant short-term price hikes on imported goods, ranging from electronics and cars to everyday groceries, could in turn "contribute to inflationary pressure", said EV Magazine, forcing central banks to "raise interest rates, potentially slowing economic growth and increasing borrowing costs for businesses and consumers".
The problem, said Sky News' Conway, is that "there is only so high one can lift these fees before they begin to stifle activity, making goods so expensive to import that domestic consumers face economic damage."
Because tariffs are "in essence a tax on consumers", Trump's Liberation Day offers the "sort of liberation that most corporate bosses and investors would happily do without", said The Economist. The upside is that 2 April "will at least bring certainty" about the president's economic path. The tariffs will likely "put downward pressure on US economic growth", according to ABC News. Goldman Sachs has "hiked its odds of a recession from 15% to 20%".
Pro: protect domestic businesses and jobs
"In most cases" tariffs are "intended to protect local industries by making imports more expensive and driving consumers to domestic producers", said the Council on Foreign Relations. Supporters argue that tariffs incentivise companies to manufacture goods within their own country, reviving industry while bolstering supply chain resilience.
"Longstanding concern" about the loss of manufacturing jobs to countries with lower labour costs has been a main driver for the anti-globalisation movement in the developed world, said the BBC. Trump has told American workers that they no longer need to be "worried" about losing their jobs to "foreign nations". Instead, he said, "foreign nations will be worried about losing their jobs to America".
Con: lobbying and corruption
Tariffs often lead to "cascading protectionism and create a fertile ground for corruption", said the free-market think tank the Cato Institute. Trump's 2018–19 tariffs on China led to "a complex process of exclusion requests" and "lobbying".
In the absence of appropriate oversight, tariff exemptions "become political currency – traded between firms and officials in what amounts to a pay-to-play arrangement", said Forbes. Rather than economic factors, decisions are determined by "lobbyists, campaign contributions, and political connections".
Pro: protecting national interests
Politically, tariffs can be used as an "extension of foreign policy", said Investopedia. Imposing them on a trading partner's significant exports "may be used to exert economic leverage".
The use of tariffs as a "negotiating tool" with other countries "might well be their main function in the hands of Mr Trump", said Conway. Take the recent 25% levies imposed on Mexican and Canadian goods, which are aimed at forcing both governments to stop the flow of illegal immigrants and supply of fentanyl into the US. Trump has already successfully wielded the threat of tariffs to break a deadlock with Colombia over the return of deported migrants.
Con: retaliatory tariffs
Retaliatory – or tit for tat – tariffs are among the "multifaceted harms of protectionist measures", said the Cato Institute.
A 2024 study by economists from international universities and the World Bank concluded that retaliatory levies imposed by China and other nations on US goods during Trump's first term had "negative employment impacts", especially for farmers.
But "if Trump’s trade war fizzled as policy" it "succeeded as politics", said NBC News. Support for Trump and Republican congressional candidates rose "in areas most exposed to the import tariffs, including the industrial Midwest and manufacturing-heavy Southern states like North Carolina and Tennessee".
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
-
Ukraine peace deal: what precedent would land concessions set
Today's Big Question Kyiv has rejected US plans for peace, which would reportedly include US recognition of Crimea as Russian territory
By Sorcha Bradley, The Week UK
-
Desert wellness in Scottsdale: the best of Arizona's Old West
The Week Recommends Boost body, mind and soul in this hub of healthy living
By Kari Wilkin, The Week UK
-
At home with the Clooneys: is arguing with your partner healthy?
The actor and his wife claim to have never argued during their 10-year marriage
By Richard Windsor, The Week UK
-
Why does the US need China's rare earth metals?
Today's Big Question Beijing has a 'near monopoly' on tech's raw materials
By Joel Mathis, The Week US
-
How will Wall Street react to the Trump-Powell showdown?
Today's Big Question 'Market turmoil' seems likely
By Joel Mathis, The Week US
-
US Treasuries were a safe haven for investors. What changed?
Today's Big Question Doubts about America's fiscal competence after 'Liberation Day'
By Joel Mathis, The Week US
-
Who would win in a China-US trade war?
Today's Big Question Tariff pain will be higher for China but Beijing is betting it can weather the storm
By Harriet Marsden, The Week UK
-
Lesotho: the tiny African nation in the crosshairs of Trump's tariff war
Under the Radar US president imposes 50% reciprocal levy on the impoverished state: the highest of his so-called 'Liberation Day' tariffs
By Harriet Marsden, The Week UK
-
What is the job market's future after Trump's tariffs?
Talking Points Economic analysts are split on what the tariffs could mean for employees
By Justin Klawans, The Week US
-
Is this the end of globalisation?
Today's Big Question American-led post-war order is 'finally starting to crumble' but that could bring about 'a more inclusive world'
By The Week UK
-
How could stock market slides affect you?
Today's Big Question Pensions, prices and jobs at risk as Donald Trump's 'Liberation Day' measures take hold
By The Week UK