US consumers paid close to 100% of the tariffs last time around.

I’ll let this report speak for it self and widen the debate.

Economic Impact of the Late-Term Trump Tariffs on China, Steel, and Aluminum (2018–2019)

When the Trump administration imposed tariffs on steel, aluminum, and a wide array of Chinese imports in 2018–2019, it set off one of the most significant trade policy shifts in recent U.S. history. Citing national security and longstanding trade imbalances, the United States levied a 25% tariff on steel and a 10% tariff on aluminum under Section 232 of the Trade Expansion Act, followed by comprehensive tariffs on roughly $$350–$370 billion** of Chinese imports under Section 301 of the Trade Act of 1974. China quickly retaliated with tariffs on about $$100 billion** of U.S. exports. These “trade war” actions remained largely in force through the end of the Trump term (and into the Biden administration), enabling analysts to observe their impacts in economic data from 2018 to 2020.

Overall, while the tariffs were intended to protect key U.S. industries and compel better trade practices from China, the bulk of economic evidence suggests they ultimately imposed higher costs on U.S. companies and consumers, with only modest benefits for a handful of protected sectors such as domestic steel and aluminum producers. This essay explores the key findings regarding who paid for the tariffs, how businesses and consumers responded, who gained from the policy, and what broader macroeconomic consequences ensued.

In March 2018, the Trump administration invoked Section 232, claiming that foreign steel and aluminum imports threatened national security.

Tariffs of 25% on steel and 10% on aluminum were imposed on most U.S. trading partners, including allies in the EU, Canada, Mexico, Japan, and South Korea.

Although some countries later negotiated exemptions or quota arrangements, these tariffs stayed in place for most of 2018–2019.

Beginning in mid-2018, the administration imposed multiple rounds of punitive tariffs on Chinese imports, citing intellectual property violations and unfair trade practices.

By mid-2019, $$350–$370 billion** of Chinese imports faced U.S. tariffs at rates of up to 25%.

China retaliated with tariffs on $$100 billion** of U.S. exports, ranging from soybeans to automobiles.

The confrontation represented one of the largest U.S. tariff increases in decades.

Early claims suggested that foreign exporters—particularly Chinese firms—would “pay” for the tariffs by lowering prices to maintain market share. However, economic studies found little evidence of significant price reductions by foreign producers. Initial research documented near-complete pass-through of tariffs to U.S. import prices, meaning prices rose almost dollar-for-dollar with the tariff increase. While in a few cases (like some steel exporters) foreign producers did eventually trim their prices, overall these concessions were modest.

Bottom line: Foreign producers generally did not absorb the tariff costs; they continued selling to U.S. importers at roughly the same prices, plus tariffs.

Since tariffs are legally paid at the border by importers, U.S. companies bringing goods into the country were the first to bear added costs. Many tried to cushion the impact by:

Temporarily accepting lower profit margins, to avoid losing customers.

Stockpiling inventory before tariffs took effect.

Seeking exemptions or reorganizing supply chains to bypass higher duties.

Over time, most of these importers could not absorb higher costs indefinitely. As a result, they passed costs on to their downstream customers (other businesses or retailers) and, ultimately, to consumers.

For many goods, consumers paid the tariffs through higher retail prices. Studies across multiple product categories (e.g., washing machines, steel-containing goods, handbags, certain electronics) found that retail prices rose significantly, often approaching a dollar-for-dollar pass-through. In some sectors, domestic companies even “over-shifted” costs by raising prices on related items not subject to tariffs (e.g., dryers alongside washing machines) to bolster margins.

Key conclusion: Contrary to frequent political claims, the tariffs were effectively paid by Americans, not by China or other foreign suppliers.
Many U.S. firms passed on tariff-related cost increases to consumers, resulting in higher final prices. Domestic producers in protected industries sometimes used this opportunity to raise prices due to the diminished foreign competition.
One of the most notable responses was reconfiguring supply chains to reduce reliance on China. U.S. importers increasingly turned to other Asian nations (especially Vietnam and Taiwan), Mexico, or India for production and assembly to avoid the Section 301 tariffs. By 2022, China’s share of U.S. goods imports declined from around 22%to 17%, while imports from Vietnam doubled, making up over half of the decline from China. Much of this shift involved “bypassing” tariffs via alternate assembly locations, though some inputs still originated from China.
Short-term behavior included front-loading imports before higher tariff rates took effect, creating inventory buildups in late 2018 and 2019. Consumers also accelerated purchases of big-ticket items like appliances before expected price jumps.

Firms negotiated partial cost-sharing with suppliers.

Many applied for tariff exclusions for vital inputs.

Where feasible, companies substituted domestic or non-tariffed materials.

In the long run, some companies made investments to develop new supply sources outside China.

Despite these mitigation efforts, the end result was widespread price increases for targeted goods and a measureable reorientation of global sourcing patterns, which often introduced inefficiencies and transition costs for businesses.

With foreign metals suddenly costlier, U.S. steelmakers raised prices, boosted output, and enjoyed higher profit margins in 2018–2019. Domestic steel employment rose slightly (about 4,800 additional jobs between March 2018 and March 2019).

Other Protected Sectors: Appliance producers, solar panel manufacturers, and others specifically targeted by tariffs on imports also benefited from reduced competition.

U.S. Treasury
Tariffs are taxes, and the federal government collected billions in new revenue, estimated at $$80–$89 billion** from 2018 to 2020. While this constituted a “gain” for the Treasury, it was essentially a transfer from U.S. importers and consumers to the government. Part of this revenue funded farmer relief payments and other programs.

Domestic Industries with Market Power
In some cases, U.S. companies not only benefited from foreign cost increases but also charged more than the tariff amount (i.e., “over-shifting” the tariff onto consumers). For example, U.S. appliance makers raised prices on untariffed dryers alongside tariffed washers.

Geopolitical Leverage
The administration used tariffs to pressure China into signing the “Phase One” trade deal (January 2020), which included some purchase commitments and limited reforms on intellectual property and financial services.

However, China did not meet the full purchase targets, and many structural issues (e.g., state subsidies) remained unresolved.

Meanwhile, tariffs on U.S. allies often created friction, mitigating any broader diplomatic or strategic gains.\

Multiple estimates indicate that by 2019, tariffs and retaliatory measures acted as a drag on the U.S. economy, reducing real GDP growth by about 0.3–0.5 percentage points. While the economy continued to expand (2.3% growth in 2019, compared to 2.9% in 2018), the trade war created uncertainties that dampened business investment and cut into export demand.

Although prices of affected goods rose significantly, the overall inflation impact was relatively modest because the tariffs covered only a fraction of total consumer spending. Studies suggest the 2018–2019 tariffs added 0.3–0.4 percentage points to general inflation over this period. Consumers felt the effects directly in categories like appliances, electronics, steel-intensive products, and certain consumer goods imports, but not all goods were tariffed.

The tariffs redistributed jobs. Protected sectors gained a few thousand positions, but industries reliant on imported inputs (e.g., automakers, machinery manufacturers, construction) faced higher material costs, reducing profitability and leading to fewer new hires or, in some cases, job losses. Retaliatory tariffs also hit U.S. farm exports, hurting agricultural communities until government aid partially offset the damage. Overall, models estimated that the 2018–2019 tariffs could reduce U.S. employment by around 140,000 jobs in the long run, a small portion of total U.S. employment but still significant for the affected sectors and regions.

Tariffs typically generate economic inefficiencies by forcing businesses and consumers to purchase higher-cost domestic goods or shift to less optimal suppliers. In the short run, productivity can suffer, and firms often delay investments due to uncertainty. Welfare-loss estimates for the U.S. suggest the net cost of the tariffs (accounting for government revenue and domestic producer gains) still amounted to billions annually—money that could have otherwise flowed into more efficient uses.

By the close of the Trump administration, the steel, aluminum, and China-specific tariffs had changed trade flows, production decisions, and consumer prices in the United States. Certain domestic producers—especially in steel and aluminum—benefited from reduced foreign competition, while the Treasury collected substantial new revenue. Yet mounting evidence shows that these gains were outweighed by wider costs to American companies and households:

Consumers paid higher prices for tariffed goods.

Importers faced squeezed margins, supply chain disruptions, and the administrative burden of navigating tariffs and exclusions.

Downstream industries relying on metals or Chinese inputs endured higher costs, hampering competitiveness and hiring.

Farmers encountered retaliatory tariffs, suffering lost sales and requiring federal assistance.

Macro performance was modestly but clearly dampened, contributing to slower growth and slight upward pressure on inflation.

Although the tariffs were intended to address genuine trade issues (e.g., global steel overcapacity, China’s industrial policies, intellectual property concerns), the aggregate economic data reveal that the burden of these tariffs fell predominantly on U.S. businesses and consumers. Foreign exporters did not broadly absorb the additional costs; instead, American importers and end buyers paid, demonstrating the classic effects of tariffs as taxes on domestic consumers.

In a world of deeply integrated supply chains, such unilateral measures also accelerated a shift in sourcing away from China to other nations in Asia and North America. While some policymakers argue that diversification from China has geopolitical value, these adjustments often entailed significant transition costs and did not meaningfully alter China’s broader economic practices. Even when the “Phase One” deal was signed, China failed to meet its full purchase commitments, leaving most tariffs in place through late 2020 and beyond.

In sum, the late-term Trump tariffs produced clear winners in a few isolated sectors but imposed widespread costs on downstream manufacturers, households, and the overall U.S. economy—highlighting the trade-offs inherent in using tariffs as a policy tool for national security and trade negotiations.

References and Data Sources

• Amiti, Mary, et al. “The Impact of the 2018 Tariffs on Prices and Welfare.” AEA Papers, 2019.
• Fajgelbaum, Pablo, et al. “The Return to Protectionism.” American Economic Review, 2020.
• U.S. International Trade Commission Reports (various).
• Econofact, Brookings, and RSM Real Economy analyses of steel, aluminum, and Section 301 tariffs.
• Tax Foundation and Cato Institute models estimating GDP, employment, and welfare impacts.
• Reuters and SCCEI (Stanford) on shifts in U.S.–China trade patterns, including the rise of Vietnam and other alternative suppliers.
• U.S. Treasury and Tax Notes data on tariff revenue collections, 2018–2020.

These sources consistently demonstrate how the Trump-era tariffs produced localized benefits for a handful of U.S. sectors and the federal government’s tax revenue, while causing a net negative impact on broad economic welfare due to higher costs, disrupted supply chains, and lost market opportunities.