This doesn’t mean all tariffs are bad any more than all taxes are bad, as we must raise some revenue. And there are perhaps some tariffs that are relevant for national security. Nevertheless, most tariffs are the product of special interest parties asking for benefits for their localized interest at the expense of the broader interest. For example, Mr. Trump’s first-term steel and aluminum tariffs resulted in seven jobs lost for each job saved or created in U.S. steel-using industries.
Mr. Trump’s second-term tariffs are much larger in scope and result in significantly more harm, most perversely at the expense of his stated goal. Jobs in manufacturing have declined since “Liberation Day,” with 75,000 jobs lost. This should not be surprising, since most U.S. manufacturing uses globally sourced inputs to some degree, and tariffs raise prices on U.S. manufacturing relative to their foreign competitors globally. U.S. automobile manufacturers, with their heavy partnerships with Canada and Mexico, have been hit particularly hard.
The whipsaw nature of Mr. Trump’s on-again-off-again approach to tariffs has also contributed to business uncertainty. This is a major reason why business fixed investment (apart from the AI boom) has been flat, a statistic not helpful for our long-term growth prospects.
Nor have Mr. Trump’s tariffs helped correct his most hated villain — the trade deficit. The trade deficit is a meaningless statistic since every deficit is offset by a capital account surplus (i.e., foreign investment in the U.S.), which is almost always considered a good thing and indeed is a large part of Mr. Trump’s program. Yet the payments must balance, so any foreign investment in the capital account is offset by a deficit in the current account (where the trade deficit appears). Nevertheless, the trade deficit in 2025 was almost exactly the same as former President Joe Biden’s last year ($901B vs $903B). For all these economic reasons, Americans should rejoice at the Supreme Court’s decision.
Yet there is something far more important than the economic outcome, and that is the preservation of constitutional checks and balances. An imperial presidency of Donald Trump is just as dangerous as an imperial presidency of Joe Biden. Mr. Biden tried to arrogate the power to transfer student loans to the public treasury with no constitutional support, and the Supreme Court properly rebuked him. Similarly, Mr. Trump’s effort sought to transfer core legislative powers to the executive branch, something that could not pass the major questions doctrine. In a highly partisan era where the court is accused of favoring one side or bowing to political pressure, we all ought to be encouraged by the court calling balls and strikes as they see them.
Jeff Haymond is a professor of Economics at Cedarville University