Macroeconomics
U.S. Inflation (2021–2026): Causes, Drivers, and International Context
CPI from 9.1% peak to 2.4%, what caused it and what the Fed did.
Fiscal Policy
U.S. Federal Spending: What We Spend and What It Costs
Where $7.4 trillion goes, and why interest now exceeds defense.
Economics
Job Creation Claims: Presidents vs. The Data
Every administration’s jobs record against BLS primary-source data.
Do Tariffs Help U.S. Manufacturing?
Steel tariffs, tire tariffs, China tariffs, and the 2025–2026 escalation: every major episode measured by jobs saved, jobs lost downstream, cost per job, consumer prices, and trade deficit impact. USITC, Federal Reserve, CBO, and BLS data. The national security case and the economic efficiency case, each tested at full strength.
Why the answer depends on the metric
The answer depends on which metric you prioritize: jobs in a specific protected sector vs. total employment vs. consumer costs vs. national security vs. GDP. Tariffs usually do protect the targeted industry in the short run. The question is whether the broader economy pays more than the protected sector gains. The national security argument for some tariffs is mainstream economics, not a fringe position, but it is different from the claim that broad tariffs grow manufacturing overall.
The short answer
No, not on net. Protected industries do gain output and jobs, but the industries that buy from them lose more, and the jobs that were lost to automation rather than to trade do not come back either way.
The 2025–2026 Tariff Regime
As of March 2026, the U.S. maintains the broadest tariff regime since the 1940s. Key layers: Section 232 tariffs at 25–50% on steel and aluminum (expanded to autos, copper, semiconductors); a Section 122 temporary 10% global surcharge on most imports; country-specific tariffs of 10–125% on China, 25–35% on Canada/Mexico (with USMCA exemptions), and 15–20% on the EU. Legacy Section 301 tariffs on Chinese goods include 100% on EVs, 50% on semiconductors, and 50% on solar cells.
The Supreme Court struck down the largest layer in February 2026
On 20 February 2026 the Supreme Court held 6–3 in Learning Resources, Inc. v. Trump that the International Emergency Economic Powers Act does not authorise the President to impose tariffs. That removed the single largest source of the 2025 increases: the IEEPA baseline tariff, the country-specific top-ups on China, the EU and others, and the emergency orders covering Canada, Mexico and fentanyl. Section 232, Section 301 and normal MFN rates were untouched.
The effect was large and immediate. Global Trade Alert put the trade-weighted average US tariff falling from 15.3% to 8.3%. Roughly $165 billion in duties already collected under IEEPA may have to be refunded to importers, which is still being worked out.
Within hours the President invoked Section 122 of the Trade Act of 1974 and imposed a 10% surcharge effective 24 February 2026. Section 122 is time-limited: that order ran 150 days, to 24 July 2026. What replaced or extended it after that date has not been confirmed in this review, so the composition of the current regime should be checked before relying on the layer list above.
Effective tariff rate (June 2025)14.7% (highest since 1938)
Effective rate (Oct 2025)18.0% (highest since 1934)
Effective rate (March 2026)10.5% (after the SCOTUS ruling)
Effective rate (July 2026, latest)6.7% (USITC customs data)
Pre-2025 baseline~2.8%
Household cost estimate~$1,230/year (Tax Policy Center)
Affected trade$3+ trillion annually across layers
Both protectionist and free-trade analyses agree on core mechanics: tariffs raise the domestic price of the tariffed good, benefit domestic producers of that good, and cost domestic consumers and businesses using it as an input. The debate is over net effects: whether upstream gains plus strategic benefits outweigh downstream losses plus deadweight costs plus retaliation.
The Concentrated Benefits, Diffuse Costs ProblemJobs in industries that use steel outnumber jobs in industries that make steel by about 80 to 1. When a steel tariff saves 1,000 steelworker jobs, those workers know it and are politically vocal. When the same tariff raises costs for auto, construction, and appliance workers, each individual barely notices. This political asymmetry between visible beneficiaries and invisible losers is the central dynamic in every tariff debate.
The Historical Record: Every Major Episode
Steel jobs protected~3,500 (IIE estimate)
Downstream jobs lost~200,000 (Trade Partnership)
Cost to steel users~$2 billion/year
Duration21 months (lifted after WTO ruling)
Tire jobs saved~1,200
Consumer cost (2011)~$1.1 billion
Cost per job saved~$926,000
Net jobs (after retail losses)~−2,531
Steel tariff25%
Aluminum tariff10%
Steel imports−24% (USITC)
Steel production+1.9%
Steel employment+4,800 (2018–2019)
Net manufacturing employment−1.4% (~175,000 jobs; Fed)
Downstream output loss (2021)−$3.48 billion (USITC)
Steel price surge$731 → $1,001/mt (Jan–Jul 2018)
Source for 2018: steel-production employment (NAICS 3311) was about 1,000 higher in November 2019 than in March 2018 when the tariffs took effect, the same figure reported by the Commerce Secretary; downstream losses of about 75,000 in steel- and aluminum-using sectors derive from Flaaen & Pierce (Federal Reserve). PIIE separately projected 8,700 steel jobs created before the tariffs took effect, which is a forecast rather than an observed outcome and is not what is plotted. The Bush 2002 figures come from the widely cited Trade Partnership estimates, which are contested: EPI argues that class of model overstates losses. They have not been re-verified here and should be read as the high end of a disputed range.
China Tariffs (2018–2019 Section 301)
Domestic production boost+0.4% (USITC)
Consumer/importer cost$51 billion gross annually (Fajgelbaum et al.)
Net welfare loss$7.2 billion/year (0.04% GDP)
Ag export losses (retaliation)>$27 billion cumulative
Farm bailout cost$23 billion (2018–2019 MFP)
China share of affected imports17% → 12% (trade diversion)
Manufacturing jobs (since April 2025)−63,000 to −108,000 (BLS)
ISM PMI (Dec 2025)47.9 (contraction; 10+ months below 50)
CBO GDP impact−0.4–0.6% long-run GDP level
Inflation impact (CBO)+0.4pp in 2025 and 2026
The Cost-Per-Job-Saved Metric
Bush steel (2002)$400,000–$584,000 per job
Obama tires (2009)~$926,000 per job
Trump steel (2018)~$650,000 per job
Typical steelworker wage$50,000–$68,000/year
Cost-to-wage ratio8–18x annual pay per job saved
The cost-per-job-saved metric is brutal for broad tariff defenses because it puts the visible labor benefit beside the broader price burden. In every major episode, the economy-wide cost per protected job has been many times larger than the wage of the job itself.
Source: PIIE (Hufbauer) • BLS wage data. The $650,000 per job figure for the 2018 steel tariffs is corroborated independently (Tax Foundation cites the same estimate). The Bush 2002 figure of $584,000 and the 2009 tire figure of $926,000 were not re-verified in this review; PIIE’s commonly cited estimate for the tire tariffs is about $900,000 per job, so treat the $926,000 as approximate.
Tariffs vs. Automation: The Elephant in the Room
Ball State (2000–2010)87.8% of job losses from productivity/automation
Trade share13.4% from trade
China Shock (Autor et al.)2.0–2.4 million jobs lost 1999–2011
Manufacturing peak19.6 million (June 1979)
Current~12.6 million (Feb 2026)
Both things are true at once: automation explains most of the aggregate decline in manufacturing employment, while import competition explains severe local and sectoral dislocation. This matters because even if a tariff blocks imports and restores some production, the jobs may not come back one-for-one if the surviving domestic plants are highly automated.
The Trade Deficit QuestionThe overall trade deficit is driven by the gap between domestic saving and investment, not by whether trade deals are “good” or “bad.” Bilateral deficits are economically weak scorecards: the U.S.-China bilateral fell, but sourcing moved to Vietnam, Mexico, and Taiwan. The overall goods-and-services deficit: $552B (2017), $621B (2018), $577B (2019), $679B (2020), $859B (2021), ~$962B (2022), ~$784B (2023), ~$918B (2024), ~$916B (2025). Not a sustained post-tariff narrowing.
Source: BEA and Census, U.S. International Trade in Goods and Services, December and Annual 2025 (released 19 February 2026). The 2025 deficit was $901.5 billion, down $2.1 billion from $903.5 billion in 2024; exports rose $199.8 billion and imports rose $197.8 billion. BEA revises earlier years, so the pre-2024 points reflect figures as previously published and may differ slightly from the current vintage.
Steelman: The Case That Tariffs Help
National securityDomestic capacity in semiconductors, rare earths, pharmaceuticals, and defense inputs has genuine strategic value that GDP accounting underweights. The Biden supply-chain review and USTR Section 301 changes tied tariffs to U.S. investment in chips, batteries, and clean energy. This is mainstream economics, not fringe.
China Shock was realAutor, Dorn & Hanson documented 2.0–2.4 million jobs lost from Chinese import competition, concentrated in specific communities with lasting damage. The free-trade consensus underestimated adjustment costs. Communities did not “just adjust.”
Bargaining leverageTariffs sometimes extract concessions. The 2019 U.S.-Canada/Mexico deal removed steel tariffs and retaliation while establishing monitoring. USTR Greer claims 75+ countries sought negotiations after the 2025 push.
Manufacturing multipliersMoretti estimates ~1.6 additional local jobs per manufacturing job. Factory closures devastate towns; tariffs that preserve strategic clusters have spillover value beyond the direct headcount.
COVID exposed fragilityPandemic shortages in PPE, pharmaceuticals, and semiconductors demonstrated dangerous dependencies. Some reshoring via tariffs buys resilience that free-trade models don’t price.
USITC found real gainsSection 232 reduced steel imports 24%, raised domestic production 1.9%, and pushed capacity utilization to 80–81%. In the protected sectors, tariffs delivered measurable results.
Steelman: The Case That Tariffs Hurt
Regressive taxTariffs function as a consumption tax that hits lower-income households hardest. Tax Policy Center: bottom quintile sees a larger tax-rate increase than the top. ~$1,230 per household in 2026.
Downstream destructionFed found net manufacturing employment losses once input costs and retaliation were counted. USITC found $3.48 billion in downstream output losses in 2021 alone. Steel-using industries employ 80x more workers than steelmaking.
RetaliationEvery major tariff action triggered retaliatory tariffs. Agricultural export losses exceeded $27 billion; USDA paid $23 billion in compensation. Retaliatory tariffs were politically targeted (Harley-Davidson, soybeans).
Trade diversion, not reshoringChina’s share of affected imports fell 17% → 12%, but sourcing moved to Vietnam, Taiwan, Mexico, not back to U.S. factories. Domestic shipments rose only 0.4% under Section 301.
They become permanent“Temporary” tariffs create political constituencies for permanence. The 2018 Section 301 tariffs are still in place and were expanded. Section 232 was preserved and doubled to 50%.
Expert consensus85%+ of economists in surveys agree tariffs reduce overall welfare. The Clark Center poll on steel/aluminum tariffs found zero respondents agreeing they would improve Americans’ welfare.
Key Voices and Confidence Ratings
Jamieson GreerU.S. Trade Representative. BA BYU, JD UVA, joint MA Sciences Po. Frames tariffs as Hamiltonian industrial strategy; cites 75+ countries seeking negotiations and 2.3% annualized growth. Critique: Correlates macro growth with tariffs without isolating the effect; BLS shows net manufacturing job losses.
Robert E. ScottDirector, EPI Trade Policy. PhD UC Berkeley. Argues steel/aluminum tariffs produced $15.7B+ in new investment and 3,200+ direct jobs; China Shock caused 3.7M+ losses. Critique: Sector-specific gains don’t offset economy-wide losses once downstream costs counted.
Oren CassCEO, American Compass. Williams/Harvard Law. Argues manufacturing multipliers and community externalities justify short-term price increases for long-term wage growth and resilience. Critique: ISM PMI contracted 10+ months in 2025; manufacturing employment fell despite tariffs.
Shawn Fain / David McCallUAW President / USW President. Labor voices arguing targeted tariffs force domestic investment and preserve union jobs. Fain cites Stellantis committing billions to U.S. plants. Critique: Headline investments don’t prove net national gains once higher vehicle prices and job losses in input-using sectors are counted.
Kimberly ClausingUCLA Law / PIIE. PhD Harvard. Called 2025 tariffs the “largest tax increase on American consumers in a generation”, ~$1,700/household. Co-authored “Tariffs as Fiscal Policy” with Obstfeld. Critique: Models may understate domestic supply response and bargaining gains.
Flaaen & PierceFederal Reserve Board economists. Found 2018 tariffs associated with 1.4–2.7% relative manufacturing employment decline. Input costs (−1.1%) and retaliation (−0.7%) outweighed import protection (+0.3%). Critique: Short-run focus; doesn’t price national-security or reshoring benefits.
Chad BownPIIE Senior Fellow; former State Dept. chief economist. PhD Wisconsin. Found real U.S. imports from China down 28% in 2025 but offset by 9%+ rise from other countries, trade diversion, not reshoring. Critique: Pro-tariff side says even diversion diversifies supply chains.
Scott LincicomeVP, Cato Institute. JD, former trade lawyer. Cites BLS: 63,000–108,000 manufacturing jobs lost in 2025; steel production in 2024 was lower than 2017 despite tariffs. Critique: Libertarian framework may systematically underweight legitimate security rationale.
| Finding | Confidence | Basis |
|---|---|---|
| Tariffs raise domestic prices of targeted goods | HIGH | Universal finding; ~100% pass-through in 2018 data |
| Protected sectors see modest output/employment gains | HIGH | USITC: steel imports −24%, production +1.9% |
| Downstream costs exceed upstream gains in net employment | HIGH | Federal Reserve: net −1.4%; consistent across episodes |
| Retaliation harms U.S. exporters (especially agriculture) | HIGH | USDA: >$27B ag losses; $23B bailout |
| Tariffs reduce the overall trade deficit | LOW | Deficit stable/higher 2018–2025; diversion, not reduction |
| Some tariffs justified on national security grounds | HIGH | Mainstream economics; specific to chips, rare earths, defense inputs |
| Broad tariffs grow manufacturing employment overall | LOW | BLS: manufacturing declined in 2025; consistent with historical episodes |
| Long-run reshoring offsets short-run costs | MEDIUM | Plausible but unproven at scale; some investment announced, effects take years |
Claims and evidence
Claim“Tariffs bring back manufacturing jobs”
EvidenceMixed. Protected sectors (steel, aluminum) see modest job gains (+1,000–4,800). But the Federal Reserve found 2018 tariffs caused a net 1.4% reduction in manufacturing employment (~75,000–175,000 downstream jobs lost) once input costs and retaliation were counted. Manufacturing employment fell 63,000–108,000 in 2025.
Claim“Tariffs reduce the trade deficit”
EvidenceNot supported. The U.S.-China bilateral deficit fell, but the overall goods deficit was stable or higher post-2018 and post-2025 ($552B in 2017 → ~$916B in 2025). Tariffs mostly rerouted trade through Vietnam, Mexico, and Taiwan rather than reducing it.
Claim“Tariffs are just a tax on Americans”
EvidenceLargely supported. Amiti, Redding & Weinstein found ~100% pass-through to U.S. prices in 2018. Tax Policy Center estimated ~$1,230 per household in 2026. But the claim misses that some tariffs also generate domestic production, investment, and strategic capacity that standard tax analysis does not capture.
Claim“Tariffs are necessary for national security”
EvidencePartially supported for specific sectors. Domestic capacity in semiconductors, rare earths, pharmaceuticals, and defense inputs has genuine strategic value. But “national security” has been used to justify tariffs on products with weak security rationale (e.g., derivative steel products, furniture, lumber).
Cite this article
TruthBased.org. “Do Tariffs Help U.S. Manufacturing?” Published March 2026. https://www.truthbased.org/do-tariffs-bring-back-manufacturing-jobs
What would change this conclusion
A tariff episode where manufacturing employment rose durably in the protected sector without larger offsetting losses downstream, measured at least three years out, with cost per job saved below the wage of the jobs protected.
Sources and Methodology Disclosures
Learning Resources, Inc. v. Trump, decided 20 February 2026. Supreme Court held 6–3 that IEEPA does not authorise the President to impose tariffs, striking the IEEPA baseline tariff, the country-specific top-ups and the emergency orders, while leaving Section 232, Section 301 and MFN rates intact. cfr.org, globaltradealert.org
Penn Wharton Budget Model, Effective Tariff Rates and Revenues (updated 9 September 2026). Source for the current effective tariff rate of 6.7% as of July 2026, computed from USITC customs data as duties collected over import value, against 2.3% in January 2025. Also the source for China at 22.8%, the highest among major trading partners. budgetmodel.wharton.upenn.edu
BEA and Census, U.S. International Trade in Goods and Services, December and Annual 2025 (19 February 2026). Source for the corrected deficit series endpoints: $901.5 billion in 2025 against $903.5 billion in 2024, with exports up $199.8 billion and imports up $197.8 billion. bea.gov
Note on measure. Effective tariff rate estimates differ by method and are not interchangeable. The 6.7% figure is realised customs duties over import value. Yale Budget Lab’s import-weighted statutory measure gave 11.1% as of 1 April 2026, and its consumer-facing estimate after the ruling was 9.1%. The figures in the block above come from different vintages and methods, which is why each row carries its date.
USITC. Economic Impact of Section 232 and 301 Tariffs (2023). Official import, price, production, and downstream effects. usitc.gov
Flaaen & Pierce. Federal Reserve FEDS 2019-086. Industry-level manufacturing employment effects. federalreserve.gov
Amiti, Redding & Weinstein. JEP (2019) / NBER. Tariff pass-through and real-income losses. aeaweb.org
Fajgelbaum et al. QJE (2020). Welfare-cost estimate for the 2018 trade war. oup.com
CBO. Effects of Tariffs and Trade Barriers (2019; 2025–2026 updates). GDP, inflation, and deficit projections. cbo.gov
PIIE. Cost-per-job analyses (Hufbauer, various). Steel safeguards, tire tariffs, Section 232. piie.com
Budget Lab at Yale. 2025–2026 tariff trackers. Effective rates, household costs, revenue, early price effects. budgetlab.yale.edu
USDA ERS. Retaliatory Tariffs on U.S. Agriculture (ERR-304, 2022). Agricultural export losses. ers.usda.gov
BEA. Annual trade releases (2017–2025). Official trade-deficit series. bea.gov
Ball State / Conexus. Manufacturing Reality (2015). Productivity vs. trade job-loss decomposition. conexus.cberdata.org
Autor, Dorn & Hanson. China Shock papers (2016/2021). Local labor-market trade-shock estimates. uchicago.edu
Tax Policy Center. 2025 tariff distributional analysis. Household burden and regressivity estimates. taxpolicycenter.org
BLS / FRED. Manufacturing employment and wage series. Official labor-market data. fred.stlouisfed.org