Tariffs: Who Pays, Who Profits
A family-run appliance store in Ohio ordered a shipment of washing machines from China last month and was stunned to see costs had jumped 20% overnight. The reason? Renewed U.S. tariffs on imported appliances. “I’m stuck raising prices or cutting into profits,” the owner says. His predicament underscores a reality shaping global trade: Tariffs, often touted as tools to protect domestic industries, have complex and cascading consequences for businesses, consumers, and workers.
Tariffs are taxes imposed on imported goods, designed to make foreign products more expensive and incentivize domestic production. While politically framed as safeguards for fentanyl distribution or American jobs, their economic impact is far-reaching—and rarely confined to boardrooms.
A 2023 study by the Tax Foundation found that U.S. tariffs on Chinese goods cost the average household $1,300 annually. Everyday items—from electronics and clothing to groceries like Mexican avocados (up 10% in 2023 due to tariffs)—absorb price hikes. Small and midsize businesses reliant on global supply chains face squeezed margins. The National Retail Federation reports that 62% of retailers raised prices in 2023 to offset tariffs, risking customer loyalty.
When China retaliated with tariffs on U.S. soybeans in 2018, exports plummeted 75%, devastating farm communities. Similarly, U.S. automakers like Ford blame tariffs on foreign steel for $1 billion in annual added costs, leading to layoffs.
Tariffs have a few winners. Domestic steel producers, for example, saw revenue rise 15% in 2023 after tariffs on foreign metals. The Solar Energy Industries Association credits tariffs on Chinese panels with creating 15,000 U.S. manufacturing jobs. Tariffs generated $85 billion in 2022, though this accounts for less than 2% of federal revenue.
Proponents argue tariffs defend strategic sectors. “Without tariffs, China’s subsidized steel would wipe out U.S. mills,” says Scott Paul of the Alliance for American Manufacturing. Critics counter that costs outweigh gains. A 2023 Peterson Institute study found tariffs saved 16,000 steel jobs but cost 75,000 jobs in downstream industries like auto manufacturing. “Tariffs are economic chemotherapy,” says economist David Autor. “They target a problem but inflict collateral damage.”
Since tariffs often hit small import-dependent businesses hardest, many are turning to hyper-local networks. In Dayton, Ohio, a coalition of 12 small manufacturers pooled orders for steel to negotiate bulk pricing, offsetting 2023 tariff hikes by 15%. Co-ops like the National Small Business Trade Council offer shared legal and logistics support to navigate customs costs. Communities are also mapping regional suppliers. The Austin Tech Alliance connected 50 local firms with Texas-based microchip producers, reducing import reliance.
Rising prices on everyday goods have spurred grassroots solutions. In California, parent groups organized “community bulk buys” of diapers and baby formula to bypass retailer markups. Farmers’ markets and community-supported agriculture (CSA) programs have expanded access to tariff-free produce. “When avocado prices spiked, our CSA sourced Florida-grown alternatives,” says Maria Lopez, a Miami organizer.
Workers in industries harmed by retaliatory tariffs are accessing retraining initiatives. Iowa’s Tariff Impact Fund subsidizes tuition for farmers transitioning to sustainable energy sectors. The United Auto Workers partnered with Michigan community colleges to train displaced auto parts workers in EV battery manufacturing.
After Chinese tariffs crushed soybean exports, impacted towns are lobbying for targeted relief. Rural counties in Illinois successfully pushed for state-funded crop insurance reforms. The Coalition of Tariff-Impacted Communities, representing more than 200 towns, pressures Congress to redirect tariff revenue to infrastructure grants. Forward-thinking communities are diversifying economies to reduce tariff vulnerability. Erie, Pennsylvania, hit hard by steel tariffs, used federal grants to build a wind turbine plant, creating 600 jobs. States like Georgia now offer tax credits to businesses that source 30% or more materials locally.
Tariffs test communities, but collaboration can turn vulnerability into resilience. By pooling resources, advocating collectively, and reinvesting in local infrastructure, affected populations are not just weathering the storm—they’re rewriting the playbook on trade policy’s human impact. For policymakers, the challenge lies in balancing protectionism with pragmatism. For everyday Americans, adaptation is everything. As economist Tara Sinclair notes, “Tariffs reveal interdependencies. The communities thriving today are those leveraging interdependence as a strength, not a weakness.”