On February 1, 2025, President Donald Trump reinvigorated America’s long-standing tariff debate, imposing a 25 percent tariff on many goods from Canada and Mexico, a 10 percent tariff on Canadian oil, and a 10 percent tariff on Chinese imports.1 After negotiations, the administration agreed to a thirty-day pause on tariffs on Canada and Mexico in exchange for the promise of stronger border security measures. Meanwhile, China retaliated with tariffs on U.S. goods, escalating trade tensions and imposing additional costs on businesses in both countries. Ten days later, Trump announced sweeping tariffs on foreign steel and aluminum, slapping a 25 percent tariff on metals from all other countries.2 Unlike during Trump’s first term, the administration says it will grant no exceptions for American companies that rely on foreign steel and aluminum.
These measures were welcomed by some domestic steelmakers who had been lobbying the Trump administration for “protection” against foreign competition. Kevin Dempsey, the president of the American Iron and Steel Institute, stated that the group welcomed Trump’s “continued commitment to a strong American steel industry, which is essential to America’s national security and economic prosperity.”3 However, businesses that use metals to make other products, such as car manufacturers and food packaging companies, objected to the rising costs. Robert Budway, president of the Can Manufacturers Institute, supported the tariffs but nevertheless warned of “unintended consequences” for the nation’s food security when tariffs are placed on tin-plate steel.4
Supporters of Trump’s tariffs include politicians such as Senator Josh Hawley and former U.S. Trade Representative Robert Lighthizer. Both argue that tariffs protect American industries from “unfair” foreign competition, particularly from nations such as China where the government heavily subsidizes many industries. Hawley, who has introduced multiple bills in Congress that would impose tariffs on goods from China, argues that America has an “unsustainable trade deficit”; and Lighthizer claims that without tariffs, “[w]e and our children are poorer and our ostensible trading ‘partners’ are richer.”5
Trump champions tariffs as part of his broader economic protectionist agenda, arguing that they safeguard American industries and help rebuild the nation’s manufacturing base. He also claims his tariffs combat fentanyl abuse in America by punishing the Canadian, Chinese, and Mexican governments for their alleged roles in the crisis (citing the production of fentanyl precursors in China and Canada and Mexico’s failure to prevent the trafficking of the drug into the United States).6
But tariffs don’t tax foreign businesses or governments—they tax you. Every time you buy groceries, fill your gas tank, or replace your car or appliances, you’re paying the price for these government-imposed penalties on your freedom to trade, which restrict your choices and force you to pay more for less. Tariffs won’t stop addiction or protect American producers; they’ll just make life more expensive. Tariffs aren’t a solution—they’re a blatant violation of individual rights masquerading as economic policy in service of political power and cronyism. The evidence is clear: history, economics, and rational moral principles all demonstrate why tariffs fail—and why free trade is the only rational alternative.
A History of Failure: Tariffs in America
From the founding of the American republic, politicians and businesses have used tariffs as tools of political favoritism. The Tariff Act of 1789 had the stated intention of funding the federal government, but it quickly became a way for northern manufacturers to shield themselves from competition. Throughout the 19th century, high tariffs were promoted under the so-called American System, an interventionist program that also involved federally funded infrastructure, and a national bank to manage credit and currency. Although these measures were ostensibly intended to foster economic growth and national unity, they ultimately distorted markets, entrenched political favoritism, and inflamed tensions between the North and South by increasing prices for northern farm equipment that southern farmers needed.7
The Smoot-Hawley Tariff of 1930, imposed despite dire warnings from economists, triggered an escalation of reciprocal tariffs, collapsed international trade, and worsened the Great Depression. Levied under the guise of protecting American industries by raising tariffs on more than twenty thousand imported goods, the Smoot-Hawley tariffs instead triggered a devastating global trade war that deepened the Great Depression. Economist Thomas Rustici, in his analysis of Smoot-Hawley, describes how protectionism crippled entire industries, leading to mass unemployment, bankruptcies, and severe financial hardship for American families.8
Before Smoot-Hawley, the U.S. automotive sector thrived on exports. However, retaliatory tariffs from other countries slashed international demand for American-made cars. By 1933, the industry had lost an estimated $1.5 billion in exports, devastating firms such as Ford and General Motors. Factory closures and layoffs followed, sending thousands of auto workers into unemployment.
Farmers, already suffering from falling crop prices, were particularly hard hit. Smoot-Hawley raised import duties on foreign agricultural goods, prompting other countries to retaliate by blocking U.S. farm exports. The result was catastrophic: wheat and cotton prices collapsed, farm incomes plummeted by more than 60 percent, and thousands of farmers lost their land. Many resorted to extreme measures, including slaughtering livestock they could no longer afford to feed.
By 1933, U.S. unemployment had reached 25 percent, and Smoot-Hawley worsened the downturn. Families endured widespread poverty, losing homes and life savings as businesses and banks failed. Many survived only by growing their own food and making their own clothes. Rustici describes how some unemployed men rode freight trains across the country searching for work, while others stood in bread lines for basic sustenance. The human toll of this outbreak of protectionism was incalculable.
Although economists highlighted the destructive consequences of Smoot-Hawley in economic terms, they failed to make a compelling moral argument against the tariffs. By focusing solely on economic efficiency—how tariffs distort markets, reduce trade, and hinder economic growth—they overlooked the most important issue: tariffs violate individual rights. A rational moral argument shows that tariffs are fundamentally unjust because they impose coercive restrictions on individuals, limiting their ability to exercise their judgment, produce values, and freely trade them with others—which, in turn, leads to economic disaster and widespread human suffering. Without moral clarity, the tariff debate remains fixated on numbers and ignores the essential point that economic freedom is a right that must be protected absolutely. This leaves the tariff debate wide open for advocates of government intervention to falsely claim the moral high ground and thereby win popular support.
Following World War II, successive U.S. administrations, particularly those of Presidents Truman and Eisenhower, reduced trade barriers, which promoted global economic stability and growth. This policy shift led to the General Agreement on Tariffs and Trade (GATT) in 1947, which laid the foundation for freer global trade. Although protectionist pressures persisted, especially in such sectors as agriculture and manufacturing, later administrations, including those of Reagan and Clinton, advanced significant trade liberalization efforts, such as the reduction of tariffs and the passage of the North American Free Trade Agreement. However, in recent decades, the United States has lurched back toward protectionism, with policies such as Obama’s “Buy America” mandate and Trump’s aggressive use of tariffs. Once again, history repeats itself, and the same moral and economic fallacies drive destructive policies.
The False Promise of Protectionism
Tariff advocates make several arguments supporting these taxes—all of which fall apart under scrutiny. Let’s look at three of the most common.
Tariffs Protect Jobs: Politicians claim that tariffs shield American workers from so-called unfair foreign competition. But history shows that tariffs destroy more jobs than they preserve. By raising prices on raw materials and finished goods, tariffs make it harder for businesses to compete, leading to layoffs and closures. For every job “saved” in a protected industry, many more are lost in industries that rely on affordable inputs. Kadee Russ and Lydia Cox’s analysis of the Trump administration’s 2018 steel tariffs provides a compelling example of how protectionist policies harm the broader economy. Although these tariffs were intended to protect American steel manufacturers, their research shows that the costs to downstream industries far outweighed any benefits to steel producers.9
According to Russ and Cox, the tariffs led to only about one thousand additional jobs in steel production. However, the increased cost of steel created a severe disadvantage for industries that rely on it as an input, such as automotive manufacturing, construction equipment, and household appliances. By mid-2019, these industries had suffered an estimated seventy-five thousand fewer jobs than they would have without the tariffs—meaning that for every one job gained in steel production, approximately seventy-five jobs were lost elsewhere in manufacturing.
The reason is straightforward: higher domestic steel prices raised production costs for U.S. manufacturers, making it harder for them to compete with foreign firms that could still buy steel at lower world-market prices. As Russ and Cox explain, this put U.S. exporters at a disadvantage in global markets and made domestic manufacturers less competitive against foreign rivals within the United States. The burden of these tariffs was particularly acute in steel-intensive sectors, leading to layoffs, plant closures, and slowed investment.
The researchers also highlight how tariffs increased economic uncertainty, further undermining business confidence. Companies filed more than one hundred thousand exemption requests in an effort to avoid the increased costs, but the approval process was slow, opaque, and rife with concerns over political favoritism. Meanwhile, retaliatory tariffs from other countries compounded the damage, reducing export opportunities for American manufacturers.
By early 2020, the Trump administration attempted to extend tariffs to derivative steel products, such as nails and wire, to curb import substitution. However, as Russ and Cox argue, this strategy only exacerbated the economic harm, deepening the disadvantages for industries that depended on steel as an input.
Their findings confirm the broader principle that protectionism does not “save” jobs—it merely shifts economic burdens, destroying far more jobs than it preserves. Tariffs on intermediate goods, such as steel and aluminum, ripple through the economy, punishing industries that create far more value and employ far more people than the protected sector. Rather than shielding American workers, these policies erode economic growth and competitiveness, proving once again that free trade—not government intervention—is the path to prosperity.
Tariffs Counter Foreign Protectionism: Some argue that if other countries impose tariffs, we should, too. But matching bad policies with more bad policies doesn’t make sense. Responding to another country’s tariffs with tariffs does not punish the other country—it punishes your country’s citizens. If your neighbor shoots himself in the foot, why would you shoot yourself in your foot? Some advocates of tariffs rightly argue that when foreign governments subsidize industries, they are using political force to grant those businesses a competitive advantage. This, in turn, harms unsubsidized businesses and violates the rights of producers and consumers by coercively redistributing wealth and distorting the market. If a foreign government subsidizes its industries, it is engaging in economic destruction at home and distorting trade abroad—but the answer is not to mimic its mistakes. A moral government does not interfere in markets; it protects individual rights. The rational response to foreign subsidies is not more government control but the elimination of the domestic regulations, tariffs, and subsidies that make American industries less competitive in the first place. The best weapon against economic intervention is capitalism itself—free individuals, free markets, and the removal of all state-imposed distortions in trade and production.
For instance, the Chinese government’s subsidies to its electric bus industry artificially depress prices, depriving Western manufacturers of contracts they might otherwise have won. However, the proper response to such coercion is not to impose new coercion in the form of tariffs, which further violate the rights of consumers and businesses in both countries. Instead, the morally and economically correct course of action is to remove domestic barriers—especially subsidies, mandates, and regulations—that make U.S. businesses less competitive in the first place. Freer societies are always better to live in than less free societies, and a free economy is a critically important part of a free society. The solution to foreign intervention is not domestic intervention but the complete separation of economy and state, which would ensure that American producers succeed on merit, not government favoritism. Nevertheless, figures such as former Trump economic adviser Peter Navarro argue that “tariffs are a necessary weapon in economic warfare” and that the United States must match foreign protectionist policies to avoid being “exploited” by trade partners.10 But this approach concedes the false premise that government interference in trade is necessary.
If the Canadian or Chinese governments harm their own citizens through protectionism, the rational response is not to impose self-inflicted harm through retaliatory tariffs but to embrace greater economic freedom. If Canadian businesses are forced to pay higher prices for steel due to their government’s restrictions but American businesses can freely source materials at the best prices available, which economy will thrive? A freer market, with fewer trade barriers and less regulation, fosters greater innovation and growth, leaving protectionist nations with little choice but to deregulate or fall behind—just as the European Union is now reconsidering its regulatory policies in response to competition from the United States and China.11 The solution to foreign economic controls isn’t more control at home—it’s unleashing the productive power of free individuals.
Tariffs Strengthen National Security: Some industries are indeed vital to national defense. But tariffs do not aid these industries or any other—they are exclusively harmful. Secretary of State Marco Rubio has defended tariffs under the notion that America must maintain control over critical supply chains.12 Navarro has insisted that “China’s economic aggression is the single biggest national security threat of our time.”13 Although China is a threat to the United States in some respects, that fact does not legitimize self-destructive tariffs (which are not synonymous with sanctions or other interventions necessary to protect national security in certain contexts).
Regardless of whether China poses a national security threat to the United States, it is not rational or appropriate to mirror China’s interventionism with our interventionism, whether in the form of tariffs or any other rights-violating measures. Instead, the proper solution is to remove domestic restrictions that prevent U.S. businesses from thriving in a free market. America cannot protect critical supply chains by restricting trade; rather, it must remove burdensome regulations, lower corporate tax rates, and eliminate barriers to domestic production and innovation. Rather than shielding American companies from foreign competition, the best way to neutralize strategic threats is to increase domestic productivity, foster competition, and allow businesses to shift suppliers dynamically based on market conditions, not political mandates.
For legitimate security concerns, a free-market approach includes targeted policies such as strategic stockpiles, defense contracts, and voluntary industry incentives—not blanket tariffs that punish all trade. Protectionism weakens America’s economic strength by limiting flexibility, increasing costs, and making industries dependent on government intervention. If the United States truly seeks economic resilience against potential strategic competitors, it should embrace the power of a free market to outproduce and out-innovate authoritarian regimes—rather than adopting their policies.
Why Tariffs Stick Around: Politics over Principles
If tariffs are so destructive, why do politicians continue to impose them? The immediate answer is economic ignorance. Many policy makers and voters misunderstand basic trade principles, falsely believing that tariffs protect jobs, strengthen industries, and prevent trade deficits. Politicians exploit this misunderstanding, portraying tariffs as a tool to shield American workers from “unfair” foreign competition.
But economic ignorance alone does not explain why tariffs persist. If bad economics were the sole cause, protectionism would have collapsed long ago. A deeper reason sustains tariffs: moral collectivism—the belief that the “nation” must come before the individual and that individuals should sacrifice for some alleged “greater good.” Supporters frame tariffs as a patriotic duty, a way to “put America first,” as if restricting trade strengthens the country. This same moral premise underlies other forms of government intervention—the idea that individuals must subordinate their interests to the collective, and that economic freedom must yield to national solidarity.
Even the way politicians sell tariffs reflects this moral failing. Senator Josh Hawley claims that tariffs “protect the American worker,”14 as though workers have a moral right to government-imposed shields from competition rather than a right to freely produce and trade. Former U.S. Trade Representative Robert Lighthizer argues that without tariffs, “[w]e and our children are poorer and our ostensible trading ‘partners’ are richer,”15 implying that other nations’ success harms America—a classic example of zero-sum, tribalist thinking. These arguments rely not just on faulty economics but on the false premise that the government must control trade to engineer social outcomes.
Tariffs also persist because they protect entrenched interests. Politicians secure votes from industries that gain an advantage in the short term, while the costs—higher prices, job losses in downstream industries, and economic inefficiencies—spread across millions of individuals who may not realize how tariffs harm them. This redistribution of wealth through government coercion is not just economically disastrous but morally indefensible. So, although politicians push tariffs as populist rhetoric, the only “beneficiaries” are those who rely on government protection to keep producing products that would not be competitive in a free market. And once in place, tariffs are embedded in bureaucratic structures, making them difficult to repeal despite their clear harm.
Free Trade: The Moral and Practical Alternative
Tariffs don’t just hurt your wallet—they violate your freedom. They reduce your access to the best goods at market prices, forcing you to enrich politically connected industries while limiting your ability to act in your rational self-interest.
At stake here are your rights—including your right to produce, trade, and keep the rewards of your work. A free economy enables you to act in your self-interest without political interference. Tariffs violate this principle by forcibly limiting your choices and making it harder (or impossible) to purchase goods that best meet your needs—and to freely produce and trade your goods.
The next time a politician defends tariffs as a way to “help” America, ask yourself: Who, exactly, is being helped? Not the consumer, who is forced to pay more. Not the honest businessman, who is fully capable of creating value without such “help.” Not the entrepreneur, who is denied access to affordable materials. The only ones who “benefit” are those who have successfully lobbied the government to rig the game in their favor and politicians who get reelected for peddling economic nationalism as a substitute for improving human flourishing. And in the long run, even these people suffer from a weaker economy, deprived of the wealth, innovation, and opportunities that tariffs stifle.
The only morally justifiable trade policy for a free society is free trade—trade without interference, without coercion, and without government picking winners and losers. The question before us is simple: Do we want a society in which individuals are free to trade and prosper, or do we want a society in which bureaucrats dictate the terms of economic exchange? If we value liberty, the answer is clear. Tariffs must be abolished because they are an affront to the fundamental principle of human freedom—and that is why they fail in practice.
The Path Forward: Embracing Free Trade
Tariffs don’t make America great—they make life harder and worse for Americans. The proper trade policy for a free people is simple: Let people trade. If other nations choose protectionism, that’s their mistake. America should lead by example, showing the world that economic freedom leads to prosperity.
It’s time to stop letting politicians and special interests rig the game and start letting Americans make their own choices.
