This paper is a chapter in the volume The Economic Consequences of the Second Trump Administration: A Preliminary Assessment, published by The Center for Economic and Policy Research.

Introduction

President Trump has stated many goals to justify his trade war. He has argued that tariffs on imports produce leverage that the US can use to reduce inflows of fentanyl and illegal immigrants and to negotiate better trade deals. He has also argued that tariffs will advance US national security and economic resilience, and be a source of revenue for the federal treasury.

But the two most prominent arguments the President has advanced – both during the early months of his second term, and for decades prior – are that protectionism will reduce the trade deficit and increase manufacturing employment. This chapter will focus on the latter claim.

On “Liberation Day” – 2nd April 2025, when the administration announced increases in US tariff rates that would take the average rate higher than under the Smoot Hawley Tariff Act of 1930 – President Trump said: “Jobs and factories will come roaring back into our country, and you see it happening already. We will supercharge our domestic industrial base.” The President said the following on 7th January 2025: “We’ll impose new tariffs so that the products on our stores will once again be stamped with those beautiful words, made in the USA.”

Other prominent members of Trump’s administration have made similar assertions. US Trade Representative Jamieson Greer, for example, testified before the Senate Finance Committee in April: “The President wants to see factories back here.”

The President and his advisors are going to be disappointed. This chapter will argue that the tariff increases imposed by the current administration will not substantially increase US manufacturing employment. Indeed, the trade war will likely decrease the number of manufacturing jobs in the US. I will also argue that increasing US manufacturing employment is not a particularly important or desirable goal, and that the protectionist impulse is predicated on incorrect judgements of economic trends for typical workers and households.

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