Federal Reserve reports that effects of the 2018-2019 “tariffs led to job losses in the manufacturing sector and higher prices for producers and consumers. . . . Our Results indicate that tariffs have been a drag on employment and have failed to increase output.” https://www.federalreserve.gov/econres/feds/files/2019086pap.pdf

Tax Foundation’s key findings conclude that “The first Trump administration imposed tariffs on thousands of products valued at approximately $380 billion in 2018 and 2019, amounting to one of the largest tax increases in decades.” In addition, “studies find the Trump-Biden tariffs have raised prices and reduced output and employment, producing a net negative impact on the US economy.” https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/

Given the current political rhetoric from the White House about how tariffs are good for the U.S., that doesn’t square with what the economic experts have analyzed and concluded based on the tariffs imposed previously. As we wade into the waves of new tariffs, the question is who has learned from the first time around.

The U.S. agriculture sector is looking at a new trade war with concern. One article provided the following background for what happened in 2018. A “spending surge began in mid-2018 when USDA started writing checks to farmers and ranchers to pay for the damage from Trump’s trade war, which brought about higher tariffs that crushed agricultural exports and commodity prices. Farm sales to China plummeted from $19.5 billion in 2017 to just $9 billion the next year; as producers continued to hemorrhage profits in 2019, farm bankruptcies jumped nearly 20 percent last year.” https://www.politico.com/news/2020/07/14/donald-trump-coronavirus-farmer-bailouts-359932.

Indeed, the farm sector’s experience should raise eyebrows and serious questions about the past trade war and the new trade war. The Council on Foreign Relations wrote that “in 2018 and 2019, Trump authorized payments to U.S. farmers of $28 billion to offset their losses from Chinese trade retaliation. https://www.cfr.org/blog/92-percent-trumps-china-tariffs-proceeds-has-gone-bailout-angry-farmers.

China, a main target of Trump’s tariffs, refuses to sit idly by and allow the U.S. to undermine its economy. Taking the agriculture sector as an example, Reuters reports that China diversified its supply chain for certain products by acquiring more from Brazil and increasing domestic production.

China is a good observer and student. After Trump’s announcement days ago of more tariffs on China-origin goods, China announced its own next steps in confronting the U.S. tariff challenge. Instead of simply reducing its imports of U.S. goods, it announced that one U.S. company is no longer permitted to import certain products for its Chinese operations. China also indicated that ten U.S. companies were no longer permitted to do any business in China. https://www.nytimes.com/2025/03/04/us/illumina-china-unreliable-entities-list.html. Think about the potential future business operations of those U.S. companies. Can they continue to operate without operations in China?

Venturing a hunch, it is very likely that the Chinese chose certain U.S. companies to target after weighing the domestic economic significance of banning these U.S. companies from operating in China. On the flip side, the question is whether Trump’s version of “the best and brightest” engaged in any detailed economic assessment of potential economic damage to the U.S. before announcing the tariffs. Given the available data from 2018-2019, a deep-dive into the overall economic impact of all these tariffs should have been a basic prerequisite. It begs the question: Is there any responsible decision-making occurring before announcing the imposition of tariffs?

Does anyone in the administration ever speak up and point out that U.S. businesses may be harmed more by these tariffs or the retaliatory measures taken by our trading partners than the theoretical benefits of the tariffs?

Of course, time will tell how these tariffs will impact American workers, consumers and families. If the data from the past is any guide, Americans should tighten their belts and expect some rough economic waters ahead.