President-elect Trump has promised to impose 25% tariffs on all goods imported from Canada and Mexico, and tariffs as high as 60% on goods coming from China on day one of his new administration. What will these protectionist policies accomplish? Looking at research on the effects of the 2018–19 U.S.-China trade war might provide some insight. Researchers found that tariffs didn’t lower the cost of goods imported from China, and that U.S. consumers paid more for certain goods; that manufacturing jobs didn’t return to the U.S.; and that sectors targeted by retaliatory tariffs took a hit. Looking ahead, steps companies had taken to circumvent the effects of a new trade war with China, such as friend-shoring, might not be an effective hedge against future protectionist policies that install new barriers to trade with countries such as Mexico and Canada.
