In 1845, Frédéric Bastiat (born on this day in 1801) wrote to France’s Chamber of Deputies imploring the National Assembly to protect the national industry of candle-making from the encroachment of a foreign rival.
This competitor dominated the market at such a low price that domestic candlemakers were “reduced to complete stagnation.” Was this rival the British? The Americans? Neither; it turned out to be “none other than the sun!”
Bastiat’s Petition of the Candlemakers lays bare the absurdity of protectionism. Offering preferential treatment to less efficient domestic producers artificially raises prices, restricts consumer choice, and decreases exports. Tariffs harm consumers, workers, and exporters while failing to accomplish their stated goals: they fail to meaningfully shift the balance of trade or promote domestic industry and employment, and more generally harm everyone involved, including protected industries. Given these realities, it is no surprise that a negative opinion of tariffs has been a virtual consensus among economists for centuries — just ask Adam Smith:
“Such taxes, when they have grown up to a certain height, are a curse equal to the barrenness of the earth.”
– Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations
Agreement among economists has not, however, stopped the current administration from going gung-ho on protectionism, at least until late February, when the Supreme Court in a six-to-three ruling shut down three quarters of the tariffs Trump had unilaterally placed throughout 2025. With the Trump administration scrambling to find new ways to institute tariffs, it’s important to remind ourselves of the harm tariffs have done to the American economy, and the danger they present to economic freedom.
Throughout his first year in office, President Trump reiterated his belief that tariffs will improve the United States’ balance of trade, protect American jobs, and reshore outsourced jobs. However, despite what the President claims, other countries don’t pay for tariffs, working Americans do. Tariffs raise the cost of imported goods for obvious reasons, but also have an inflationary effect on domestic products, as American producers often purchase inputs from overseas, which are then subject to tariffs. These costs are then passed on to consumers through higher retail prices. This has already been occurring, as the prices of imported goods have increased by seven percentage points relative to the pre-tariff trend, with domestic goods costing nearly 4 percentage points more. More solid evidence of the harm of trade barriers comes from the first Trump administration. Raised trade barriers caused more than a $130 billion decline in annual imports, unsurprisingly increasing the domestic prices for goods. If Trump had his way, his second administration’s full slate of tariffs were projected to reduce after-tax income by nearly four percent for those in the bottom 50 percent of the income distribution, increasing the tax burden on middle-class households by at least $1,700 annually.
American producers also receive the short end of the stick. Trade barriers spike the price of inputs, raising the cost of production for domestic firms, especially ones that export goods. This effect only expands in the event of retaliatory tariffs, which in 2018 alone cost American exporters over $2 billion per month, greatly diminishing the value of American exports, and redirecting nearly $200 billion worth of trade. Domestic firms often respond to cuts in exports by laying off employees. Industries more vulnerable to tariff increases, such as manufacturing, see larger reductions in employment compared to non-affected industries precisely due to the increases in input costs. For example, the 2018 tariffs directly eliminated 75,000 manufacturing jobs. History seems to be repeating itself, as since 2025, Trump’s tariffs have cost automakers over $35 billion, and the manufacturing sector has continued to bleed tens of thousands of jobs due to uncertainty over tariffs providing unfavorable conditions for firms to hire new workers. That doesn’t sound like bringing manufacturing back.
Even the benefits that do go to domestic producers quickly evaporate because of retaliation from other nations. Tariffs antagonize other nations, stoking conflict and harming future economic cooperation efforts. In 2018, the United States placed tariffs on nearly $300 billion of Chinese goods, to which China responded by placing tariffs on over $100 billion of American goods. The European Union, Russia, Mexico, and Turkey soon retaliated with trade barriers that amounted to a 16 percent cut of United States exports, wiping out over half of the producer surplus generated from American tariffs. Altogether, by the end of 2018, tariffs were projected to have cost American consumers and companies who import foreign goods $3 billion per month in taxes and $1.4 billion in deadweight loss. American business owners and consumers are already overburdened with frivolous taxes and red tape; tariffs only make it harder for working Americans to do business.
In conclusion, the current administration’s trade policy is so frustrating primarily because of the blatant ignorance of the overwhelming evidence that tariffs have damaged the American economy. This mirrors a crucial misunderstanding of the benefits of trade. Protectionists regard imports as inherently harmful because they increase the trade deficit, making the United States more reliant on other nations. But imports are the benefit of trade. The fact that Americans can truck, barter, and trade with individuals and firms from nations all over the globe means Americans have access to the best and cheapest products. Restricting trade in the name of “self-sufficiency” is not desirable; it is impoverishing.
