Jobs vs affordable goods: the debate at the core of Trump’s tariff war

While tariffs could potentially preserve American jobs in specific industries by discouraging imports, US consumers would bear the brunt of the cost by paying higher prices at stores, according to a Pennsylvania State University economist.

Bradley Setzler, Strumpf Early Career Professor of Economics at Penn State University, said American regions with an above-average exposure to import competition from China suffered a loss of one in seven local manufacturing jobs relative to less-exposed regions, when China became a global manufacturer and exporter.

And, if an American region was highly exposed, such as through furniture or textile production, it could suffer two or even three times that job loss relative to other regions, he said.

“So, you could lose two out of seven jobs, or even three out of seven jobs in local manufacturing,” Setzler said.

At the same time, other Americans benefited in the shape of more affordable goods, he said.

“[US President Donald Trump’s] tariffs are a blunt instrument for raising the prices paid by Americans for Chinese and other foreign goods, discouraging imports and thus potentially preserving American jobs in specific industries, but at the cost of consumers potentially missing out on cheaper prices at the store,” Setzler said.

  

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