Donald Trump argues that his tariff policy is designed to make America great again. In reality, U.S. tariffs lead to trade wars, creating international tensions. The consequences of the U.S. president’s decisions will be felt worldwide, but the greatest losses will primarily be borne by American consumers.
The introduction of tariffs by Donald Trump’s administration aims to protect the U.S. domestic market from international competition and stimulate the American economy. At first glance, this might seem like a reasonable move. However, this tariff policy, despite its goal of safeguarding national interests, will ultimately become a significant burden on the average American.
Rising Prices for Imported Goods
The implementation of tariffs will primarily contribute to an increase in the prices of foreign products. Importers are forced to pay tariffs, which raises their operational costs. To maintain profitability, companies importing goods from abroad will pass these rising costs on to their customers.
Even Walmart, the largest retailer in the U.S., does not rule out price increases due to Trump’s tariff policy. At the end of last year, in an interview with CNBC, Walmart’s vice president, John David Rainey, admitted that tariffs could lead to higher prices for selected products.
Although inflation in the U.S. dropped slightly in 2025—falling from 3.0% in January to 2.8% in February during Trump’s first month in office—the likelihood of rising prices in the coming months remains high. This risk does not only apply to imported goods but also to products manufactured in the United States. Increased tariffs can drive up prices, especially in industries that rely on steel and aluminum for production. This includes the automotive, electronics, and home appliance industries, as well as construction, heavy industry, and shipbuilding.
The Impact of Steel and Aluminum Tariffs
The threat of price increases in these industries is linked to the U.S. decision to impose a 25% tariff on steel and aluminum from all countries on Wednesday, March 12, 2025. This move mirrors Trump’s action during his first term in 2018 when he introduced a 25% tariff on steel and a 10% tariff on aluminum. At the time, the tariffs mainly hurt American automotive companies. Even though car manufacturers primarily bought steel from the domestic market, the tariffs led to a reduced supply and higher prices for domestic raw materials. Consequently, automotive companies experienced a decline in profits.
Retaliatory Tariffs from the European Union
International trade is a two-way street. The United States is not only an importer but also a major exporter. In response to the 25% U.S. tariffs on steel and aluminum, the European Commission plans to introduce retaliatory tariffs. These tariffs, set to take effect in April, will apply to American goods worth approximately 26 billion euros. Such retaliatory measures will likely reduce U.S. export production and decrease revenue, just as they did during Trump’s first presidency. According to research from the U.S. Department of Agriculture, retaliatory tariffs on American agricultural and food products alone resulted in a $27 billion loss in exports between 2018 and 2019.
The Burden on Domestic Consumers
Tariffs on imported products also harm domestic consumers by restricting access to foreign goods available at competitive prices. The introduction of tariffs leads to a decrease in supply, which in turn drives up the prices of domestic products as well. In 2018, as part of the “America First” policy, Donald Trump imposed tariffs on washing machines imported from outside the U.S. This led to a reduction in the number of such appliances available on the American market and, as a result, caused their prices to increase by 12%.
Although Donald Trump has repeatedly stated that “the most beautiful word in the dictionary is tariff,” economic protectionism leads to global tensions. It can also contribute to the impoverishment of American citizens. According to calculations by the Peterson Institute for International Economics, as a result of Trump’s tariff policies, the average American household will lose approximately $1,200 per year.
Author: Dr. Paweł Janukowicz
The author holds a Ph.D. in social sciences in the field of economics and finance and is also a member of the Polish Economic Society.
