According to President Donald Trump and administration leaders, tariffs on imported goods are like medicine: bitter in the short term, but important for the long-term health of the U.S. economy. In fact, U.S. Treasury Secretary Scott Bessent has said the economy may go into a “detox period” amid spending cuts and a transition to more domestic manufacturing. But is the short-term pain going to deliver real benefits for our country?
Polling shows that Americans are skeptical. February marked the biggest monthly drop in consumer confidence since the COVID era, and declines continued into March. In a recent survey from Wells Fargo, two-thirds of Americans said they’re cutting back on spending and almost half reported putting life plans on hold. Falling stock market portfolios and a drumbeat of bad economic news encourages belt-tightening by consumers and businesses.
Those worries also hurt American businesses. As demand drops, CEO confidence has fallen dramatically. On again-off-again tariffs on imports combined with hostility from Trump towards our closest allies, retaliatory tariffs, and the strong dollar make it more expensive to make and sell goods. Canadians are cutting back on travel to the U.S., and one major airline executive told me that incoming travel bookings into the U.S. are down over 10%. For me and many Americans, it is sad to see Trump turn on our closest friends. More, it means U.S. hotels, restaurants, and stores will lose foreign visitors. These visitors matter because they add to our economic coffers and require scant government services.
The emotional impact of Trump’s policies also shapes our national mood and optimism, limiting investment and spending. It’s no surprise that Americans are cutting back on their vacation plans, too. President Ronald Reagan’s vision of a “shining city on the hill” has shifted to Trump’s vision of America as an isolated castle with an iron curtain, despite the hit to the pocketbooks of millions of Americans.
If Trump follows through on his promise to add additional tariffs, expect both our economy and the national mood to get worse. Tariffs are consumer taxes. They make prices go up, stoking inflation. Not everything can be made in the United States and not everything should be. Ultimately, we benefit from low-cost consumer goods made elsewhere. Whether it’s cars or electronics, food or factory equipment, we rely on the efficiency and lower prices of global trade to keep prices low for American consumers and businesses.
That approach frees Americans up to do what we do best: inventing, creating and producing some of the world’s most innovative products. Sadly, tariffs on inputs hurt American manufacturers too. The data is overwhelming that the tariffs imposed on steel and aluminum during Trump’s first term created a few thousand jobs in those industries, but raised costs and hurt hundreds of thousands of American workers in industries that use these products. Ultimately these tariffs along with the others that Trump is imposing will together cost American consumers billions if not trillions in higher prices.
Doubling down on tariffs also risks “stagflation,” a combination of rising prices (inflation) and slowing economic growth (stagnation). Higher tariffs are already creating “cost shocks” for businesses, which for many will be passed on to consumers. At the same time, reduced consumer spending and business investment due to economic uncertainty slows growth. A stagflationary environment would be bad for everyone, but especially the middle- and lower-income Americans who can least afford higher prices and the disruption of a lost job.
Allowing the uncertainty around tariffs to drag on for weeks and months will continue to harm Americans and our economy. For the sake of our country, President Trump should use his leverage with our trading partners strategically and find a quick off-ramp. That could include the announcement of major investments in U.S.-based factories, supporting a long-term transition towards more domestic manufacturing. An off-ramp would also allow him to shift to a low-interest-rate strategy and give Americans what they voted for in November: lower prices and cooler inflation that can propel the economy, investment, and construction, encourage growth, and reduce interest payments on the national debt. There’s no time to waste.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
Read more:
- Trump is knowingly steering the economy off the cliff with tariffs
- Trump’s tariffs are flawed and contradictory—and the ‘Mar-a-Lago accord’ is suited for the trash bin
- Trump’s tariffs program is based on flawed assumptions about the trade deficit
- Tariffs won’t make America great again: Export-Import Bank’s former chairman and president