Tariffs on steel, aluminum, and copper are sold to the public based on two promises: bringing manufacturing back to the United States and raising revenue. The problem is that these two goals are mutually exclusive. If tariffs succeed in reshoring production, revenue derived from tariffs on imports would bottom out. If revenue were to stay so high that the Administration could end the income tax (as has been suggested) the US economy would have to be entirely driven by foreign imports, thus defeating the reshoring goal. You simply cannot have your cake and eat it too on tariffs and on restoring U.S. domestic manufacturing.
Raise tariff revenue
Revenue requires imports to stay high or grow…
…which runs directly counter to onshoring.
Bring back American manufacturing
If it works, imports fall toward zero…
…and tariff revenue falls to zero with them.
What tariffs reliably do instead: act as a tax paid by domestic consumers, inviting retaliation from economic allies like Canada and Mexico — a tit-for-tat cycle that harms American production, innovation, trade and foreign policy.
When a tariff is imposed, industry doesn’t pay it — consumers do. A study of the 2018 tariffs found that higher prices were borne entirely by US importers and consumers, not foreign companies. And tariffs don’t just raise prices on imports: by limiting the pool of producers, they let domestic firms raise prices too.
Tariffs are sold as a jobs program, but the jobs they protect are dwarfed by the jobs they endanger. Every dollar of tariff not passed to consumers drags on business profits, cutting investment and capital expenditure — and constant rule changes push companies into a “wait and see” freeze.
The best way forward is to eliminate tariffs on steel, aluminum, and copper entirely and let the market improve alliances and serve consumers. Short of full elimination, these steps would spare consumers the worst:
Tariffs cannot simultaneously onshore production and raise revenue — but they reliably raise prices, cost jobs, and alienate allies. Americans pay more for groceries, cars, appliances, and homes so politicians can claim symbolic victories. These artificially created price hikes make American consumers poorer overall and are inherently regressive.
Research Director
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