By raising a protection wall to various inefficient domestic industries, Trump’s policies on tariffs, which are a protection for any number of inefficient industries, are just going to promote more inefficiency, undermining the process of real wealth generation. In a nutshell, a tariff on any imported good implies curtailing the supply of less costly goods and encouraging the supply to the domestic market of more costly domestically produced goods, punishing the domestic consumers, which are us, the Americans.
According to CNBC, while there are about 200,000 workers in the steel, aluminum and iron industries, there are 6.5 million people employed by businesses that use steel. This raises the risk of undermining rather than benefiting the US labor market. Tariffs increase costs of production for industries reliant on imported materials to produce their products. These increased costs lead to job losses in those industries. For example, President Trump’s proposed steel tariff could cost nearly 40,000 jobs in the steel-dependent auto manufacturing industry. Tariffs also cause job losses in industries reliant on exports. This is especially true if — as is likely to be the case — other countries respond to President Trump’s actions by increasing tariffs on US products.
A trade war, if this starts one, could push the global economy into a recession. By using tariffs, and ultimately imposing costs on American businesses and consumers, it puts a large segment of the economy that relies on imports at risk.