On July 20, the Trump administration made quite an admission.
In his proclamation to “adjust imports” into the United States, Trump confessed that his secretary of commerce has informed him that “despite the benefits from the aluminum tariff regime, the domestic production and supply of primary aluminum, which is critical to the US economy and defense industrial base, is still in insufficient supply.”
No matter how they preface it, the proclamation is an admission that tariffs don’t suddenly switch on domestic manufacturing for a protected industry. Ramping up the domestic manufacturing of products like aluminum takes time. Expanding or building new smelting plants takes significant capital investment, labor, raw materials, and heavy equipment. Then there’s the permitting, environmental permissions, and upgrades to the local energy grid.
All of that takes time, but US manufacturers need aluminum throughout this process.
What Trump’s proclamation does is attempt to bridge this gap in time by allowing certain companies to import aluminum at a reduced tariff rate contingent on their promise to create a greater production capacity in the future. This of course acknowledges that tariffs create an obstacle to domestic production when they make inputs to finished goods more expensive.
The answer from the Trump administration to this obstacle, unfortunately, is not to back off such costly tariffs, but to insert government into the economy even more. The Commerce Department will be empowered with the discretion to approve which companies’ plans are worthy of receiving this selective tariff relief and then determine whether those companies have met their commitments.
This policy of selective tariff relief is great for corporate lobbyists, as companies with the best political connections will likely be favored for this preferential treatment. Greater political influence over the economy’s scarce resources certainly more closely resembles a socialist economy than free-market capitalism, especially ironic at a time when Trump has been so vocal in his criticism of the recent success of self-proclaimed Democratic Socialist politicians.
Indeed, tariffs are a reflection of the kind of hubris involved with central planners. The motivation of tariff supporters is their desire to see more domestic manufacturing of certain products, as if a politician has the knowledge of the exact amount of manufacturing of which products should be done and where. Never mind the excessive political power needed to be exercised to execute their plans.
And even at the primary stated goal of tariffs — namely an increase in US manufacturing jobs — the tariffs have been a failure.
Since April 2025, when Trump made his “Liberation Day” tariff announcement, the US has lost roughly 64,000 manufacturing jobs. This was not merely a reflection of a larger decrease in employment across the economy at large. During that time total jobs increased by half a million.
North Carolina’s numbers reflect the same pattern, losing 12,600 manufacturing jobs during that time, despite the state adding about 65,000 jobs overall.
Tariffs are a tax on US consumers and businesses choosing — or desiring — to purchase foreign-made goods or inputs.
Consumers are forced to pay more for goods because lower-priced imports are no longer available, while businesses must pay more for inputs like aluminum because of the tariffs they must pay on foreign-sourced materials, or they are left only with the more expensive, domestically made options.
Even the pitch for tariffs is rife with internal contradictions.
For instance, the goal is to keep “cheap” imports out of the country to protect domestic manufacturers, but we’re also promised tariffs will generate billions in revenue for the government. Those two goals are at odds. Because tariffs are collected only on imports sold in the US, if tariffs successfully keep imports out of our country, there will be no tariff revenue collected. Conversely, if tariffs are generating billions in revenue, it means there are a lot of foreign-made goods continuing to be sold in the US, offering little protection for domestic manufacturers.
Tariffs can either raise hundreds of billions in revenue or keep foreign goods out of the US. They can’t do both.
Trump’s recent proclamation gave us a glimpse into the weakness and harmfulness of tariffs. Unfortunately, such an admission hasn’t dissuaded the president and his administration from continuing to pursue these harmful taxes but rather has prompted them to double down on government intervention into the economy.
Wanting US businesses and workers to thrive are worthy goals. Unfortunately, tariffs are the wrong policy to achieve them.
