How tariffs became America’s most expensive policy failure, destroying manufacturing jobs they claim to protect while emptying consumer wallets.
Politicians sell tariffs as job protection, but economist Kimberly Klausing cuts through the spin: They’re a direct assault on working families’ wallets while destroying the very manufacturing jobs they claim to save. The former Treasury official and UCLA professor dissects how Donald Trump’s trade war has become an expensive lesson in economic self-sabotage.
Klausing walks through the real costs: $2,500 annually per household from existing tariffs, with over half of our imports being materials that American companies need to stay competitive. When those costs rise, US manufacturers become less competitive globally, leading to layoffs rather than job creation.
The contradictions run even deeper. The same administration putatively concerned about offshoring maintains a tax system that rewards companies for moving profits overseas — American firms actually pay higher taxes on domestic income than on foreign income.
Klausing puts the current trade panic in perspective. While China trade may have cost 1-3 million jobs over a decade, that’s a fraction of the 7 million jobs the US economy naturally loses and creates every single quarter through normal business cycles. Yet we’re responding with 1930s-style protectionism in today’s interconnected global economy, where supply chains cross multiple borders and create far more complexity and disruption than existed during the Great Depression.
The conversation reveals how political rhetoric about trade obscures where the money actually goes — from working families paying higher prices to corporations and governments collecting tariff revenues, funding a policy approach that economists broadly agree makes little economic sense.
Klausing offers a clear-eyed look at what’s really happening behind the tariff wars and why the promised benefits aren’t materializing.
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