Former President Donald Trump’s tariff policy has already generated quite a firestorm over its economic impact and constitutional legality. For one, Trump has placed tariffs on many imported goods across the board, covering almost all trade partners. This decision has directly impacted the costs that American consumers and businesses need to pay. This disastrous policy has contributed to shocking increases in the cost of living for everyday Americans. It has made our foreign trade partners distrust U.S. commitments, prompting some to seek alternatives to U.S. products.
The nationwide application of the tariffs have resulted in sharp price increases for many goods that are imported. Consumers continue to bear the burden of skyrocketing costs on everyday goods, while American businesses face higher costs producing goods at home when they import materials from overseas. Similarly, foreign suppliers selling on the American market suffer from a lower demand due to these tariffs. This decline in demand means less economic activity abroad. Consequently, the ability and willingness of these foreign entities to buy U.S.-sourced goods decreases.
In light of these developments, many economists argue that eliminating Trump’s tariffs could significantly alleviate the financial burden on American households. Scaling back these tariffs would almost certainly reduce costs for imported inputs and consumer goods. This, in turn, could increase consumption by foreign markets of U.S. manufactured and services-based products. This would lead to a healthier trade ecosystem that favors stronger and more equitable economic partnerships.
The nation has yet to reckon with the long-term implications of this tariff policy, especially for U.S. global standing. Our vital trade connections have deteriorated. In retaliation for the tariffs, other countries have doubled down on their pursuit of increased alignment with China. The combination of these changes represents an existential threat to U.S. economic interests, which would weaken U.S. influence and potential market access overseas.
Critics on the left point out that the Administration’s tariff policy can simultaneously make current economic problems worse while attempting to address others. This will risk creating stagflation, a situation in which the economy stagnates even as inflation climbs. This false dichotomy underscores the dangers of badly conceived policy that fails to take into account the larger economic picture.
In addition, debates over the legality of Trump’s tariffs have raised constitutional arguments into the mix. Article I, Section 8 of the Constitution provides Congress with the power to levy and collect taxes. Such authority is essential to the common defense and general welfare of the United States. The separation of powers created by the Constitution is key to that balance. This framework prevents any one branch from completely seizing control of our economic policy.
“The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States….” – Article I Section 8 of the Constitution
This constitutional framework puts into question the legitimacy of any unilateral tariff impositions absent explicit congressional authorization. Critics contend that these kinds of moves chip away at the democratic checks and balances put in place to protect against these kinds of abuses.
More than ever, the United States is charting a challenging economic course. As the report’s authors told us in discussion, experts think fiscal policy offers more effective tools to achieve desired effects than tariff policies. Policymakers would do well to address economic challenges by focusing on direct investment and targeted support measures. This strategy prevents applying unilateral approaches that can scare off foreign trading partners.