Trump Wants More Tariffs. Is that a Good Idea for US Manufacturing?

If elected, former and possibly future President Donald J. Trump would impose new tariffs on most goods coming into the country, making it his policy stance that has the potential to have the highest impact on manufacturers.

Are tariffs a good idea? And where does Democratic challenger Vice President Kamala Harris stand on the issue?

With Election Day less than two weeks away, IndustryWeek looks into the candidates’ stances on major issues impacting manufacturing, and we start with tariffs. (Discussions of Harris’ manufacturing and economic policies will run in the coming days.)

Trump Plans to Build on His First Term’s Trade Policies

Trump demonstrated his willingness to wield tariffs as a trade tool during his presidency. In those four years, his administration imposed tariffs on steel and aluminum under Section 232; a list of Chinese imports under Section 301 and solar cell and washing machine imports under Section 201.

What to Expect from Each Presidency

Various experts opined on what impacts a Harris or Trump tariff policy could have on manufacturing.

KPMG Senior Economist Meagan Schoenberger

“Whomever wins the election we are likely to see more tariffs, content requirements, restrictions on de minimis, barriers to re-upping USMCA and investment controls (among others). Tariffs are talked about most often and are a tax on importers that then could be passed on to consumers, however the others are still important for businesses.”

As he seeks a second term in office, the Republican candidate has been vocal about his readiness to once again implement tariffs. He has highlighted several proposals during his campaign. They include new tariffs of up to 20% [he initially mentioned 10%] on all foreign imports and 60% on all Chinese imports. Additionally, he has suggested imposing 100% tariffs on countries that move away from the U.S. dollar.

Kamala Harris has been more circumspect in her position on tariffs. However, while the Democratic candidate hasn’t outlined a formal position, and has even attacked Trump on the topic, the Biden administration has shown its own willingness to impose tariffs. Not only has it kept many of the tariffs imposed during the Trump administration, but earlier this year the Biden administration boosted tariffs to the tune of $18 billion on a host of Chinese imports, including electric vehicles, semiconductors, steel and critical materials.

Who Wins? Who Loses with Tariffs?

“Tariffs are essential, some form of protection is essential,” says Jeff Ferry, chief economist for Coalition for a Prosperous America, a national bipartisan organization that represents domestic producers. In a commentary released earlier this month, he pointed out that tariffs “were an integral part of America’s rise to modern prosperity in the 19th century.” Done right, tariffs “can play an important role in rebuilding our manufacturing base.”

That includes taking a sector-specific approach, he said. The commentary pointed to the 2018-2019 tariffs on washing machines and furniture as examples. “We have in the U.S. today two washing machine factories (Samsung and LG Electronics) that we did not have in 2018.”

Brian Pacula, West Monroe supply chain and ocean freight expert

“In a Trump administration, we could expect continued advocacy for protectionist trade policies aimed at reducing trade deficits and bringing manufacturing jobs back to the U.S. His party supports imposing tariffs, especially on Chinese imports, to protect American industries, as seen in the renegotiation of trade deals like the USMCA replacing NAFTA. While these policies may positively impact U.S. manufacturing by reducing foreign competition, the agricultural sector faces mixed results, with retaliatory tariffs potentially hurting exports.

"A Harris administration would likely pursue a multilateral approach to trade, working with international allies and opposing unilateral tariffs. She emphasizes sustainable trade practices that support labor rights and environmental standards and would likely reduce tariffs that harm U.S. consumers and industries. While her approach may lead to increased competition for U.S. manufacturing, it could also bring more predictable supply chains.”

And while those are relatively small sectors, steel is not: “We’ve had around 15 new steel mills … and they’re all creating good jobs. That’s an example of how a sector tariff can work,” he says.

A separate study by his organization concluded that a universal tariff on all U.S. imports, combined with income tax cuts, “would generate economic growth of $728 billion and 2.8 million additional jobs.”

On the flip side, you have Miles Free, director of industry affairs at the Precision Machine Products Association. PMPA represents the interests of manufacturers that use aluminum, steel and other metals hit with tariffs. While the association consists mainly of U.S.- and Canada-based manufacturers, its members also operate facilities internationally. Free says his organization’s members didn’t like the Trump-Biden metals import charges.

“Tariffs on steel imports negatively impact PMPA members and other downstream U.S. steel-users. Our members source almost all their steel from domestic suppliers, but what matters most is the price difference between what we pay for steel and what our global competitors pay, as steel is a significant input cost for our products.”

“We are at a huge disadvantage compared to our competitors around the globe — thanks to the tariffs.”

He also points to a report from the Tax Foundation, which states that the Section 232 tariffs on steel and aluminum, enacted during the Trump administration and continued during Biden’s, “raised the cost of production for manufacturers, reducing employment in those industries, raising prices for consumers, and hurting exports.”

And from the Institute for Supply Management: “Speaking for supply management people, we are not advocates for tariffs from a business standpoint,” says Tim Fiore, ISM (Institute for Supply Management) Manufacturing PMI Business Survey Committee chair. “Subsidies, tariffs, rebates … we are in search of the perfect market, which is a supply demand market, and anytime you throw in an artificial factor like this, it messes things up.”

He doesn’t completely decry tariffs. “There’s clearly times when tariffs are probably appropriate … I am a believer in the strategic use of tariffs as appropriate for that purpose to keep people out of your market.”

Dan Swartz, international tax services principal, Crowe LLP

Swartz says Trump’s tariff proposals, particularly the 60% tariff on Chinese imports, likely are meant to make a significant impact on domestic manufacturing, something he says the initial Section 301 tariffs “have not done.”

“[Manufacturers] largely absorbed the cost. They’ve passed it down to their customer base. It obviously has not created a lot of new manufacturing the United States. Manufacturing is still roughly 10% of the GDP. That has not really changed for a number of years.”

Regarding Trump’s statements on new tariffs, Kevin Dempsey, president and CEO, American Iron and Steel Institute, suggests it may be too soon to make an evaluation, given that they appear to be less than a complete policy proposal. That said, “Tariffs can be a useful tool. It would depend on the circumstances,” he notes. In the case of China, Dempsey points out that China continues to produce steel at levels much higher than domestic demand.

“Even though their demand is dropping, they're keeping production at very high levels and just exporting larger and larger amounts of steel into global markets. Some additional action is going to be needed on China,” Dempsey says. “Tariffs are, frankly, one of the only tools really available.”