3 Great Arguments For and Against Tariffs

Weighing the benefits and drawbacks of tariffs as America rethinks its global trade strategy.

Apr 04, 2025

Tariffs are back in the spotlight. As the U.S. implements new import taxes to bolster domestic industries and manage its debt, the debate is heating up. Are tariffs a smart tool for national strength—or a costly mistake for consumers and markets?

Here are three strong arguments on each side of the issue.

3 Arguments For Tariffs

1. Lower Borrowing Costs

Supporters say imposing tariffs can indirectly help lower U.S. interest rates. Recent tariff moves coincided with a drop in the 10-year Treasury yield to about 4.2% (reuters.com) which eases pressure in refinancing the nation’s $36 trillion debt.

Cheaper borrowing costs mean the government can refinance and service its debt more affordably.

2. Reducing Trade Deficits & Dependence

Tariffs aim to shrink the trade gap and bolster economic independence. The U.S. goods trade deficit with China was nearly $295 billion in 2024 (ustr.gov) reflecting heavy reliance on imports. Proponents argue that curbing such deficits makes America less dependent on foreign supply chains. Treasury Secretary Scott Bessent even insists that “access to cheap goods is not the essence of the American Dream” (politico.com) underscoring a focus on self-reliance over low prices.

3. Protecting Industries and Raising Revenue

By making imports pricier, tariffs encourage consumers to buy American-made products, which can help domestic industries. They also generate substantial federal revenue. In fact, President Trump’s administration has announced plans to raise additional funds through heavy tariffs on imports Tariff duties brought in over $80 billion in FY2023 (progressivepolicy.org) – money that supporters say can be used to reduce budget deficits or invest in U.S. infrastructure.

3 Arguments Against Tariffs

1. Market Volatility and Stock Drops

Tariff announcements have spooked financial markets. Major new tariffs often trigger sell-off. The S&P 500 is down nearly 10% since Wednesday marking the steepest market correction in years. Such volatility can erode Americans’ 401(k)s and confidence in the stock market.

2. Higher Prices for Consumers and Businesses

Tariffs are essentially a tax on imports, and their costs are largely passed to U.S. buyers. Federal Reserve researchers found that the tariffs “increased producer prices” for U.S. manufacturers (politifact.com) meaning companies face pricier inputs, which can lead to further price hikes or squeezed profit margins.

3. Economic Risks – Job Losses and Slower Growth

Critics warn that broad tariffs can do more harm than good to the overall economy. Higher costs and foreign retaliation can curb demand for U.S. products abroad, hurting exporters and employment. Moody’s Analytics estimated the U.S.–China trade war resulted in about 300,000 fewer U.S. jobs (politifact.com).

Similarly, the OECD projected that escalating tariffs could shave roughly 0.9% off U.S. GDP within a couple of years – a significant hit to growth. Economists note that tariffs in recent years failed to boost U.S. manufacturing output or jobs, while imposing broad collateral damage in the form of lost efficiency and higher costs.

Each of these points reflects a key aspect of the tariff debate. As the U.S. weighs new trade barriers, understanding both sides of the argument helps inform a balanced view on how tariffs impact the economy and everyday Americans.