13th September 2026
President Donald Trump has made tariffs one of the defining features of his economic policy. His argument is straightforward. Make imported goods more expensive and American companies will have an incentive to manufacture more at home. That should mean more factories, more American jobs and, eventually, a stronger domestic economy.
There is certainly evidence that some businesses are responding in exactly that way.
Ford, for example, has announced plans to move production of some Lincoln vehicles from China to the United States, with tariffs being one of the reasons behind the decision.
But there is another side to the story which is much less straightforward.
For many American businesses, a tariff is effectively a new tax on something they need to operate their business. If a US manufacturer imports components, metals, machinery or finished goods, it may have to pay the tariff when those goods enter America.
The foreign company does not normally write the cheque to the US Treasury. The American importer does.
That leaves the business with a choice. It can absorb the additional cost and accept lower profits, pass it on to customers through higher prices, find another supplier, move production or reduce the amount it produces.
For a large multinational company those choices may be difficult but possible. For a small business with a narrow profit margin, they can be much more serious.
The US Chamber of Commerce has recorded complaints from small businesses about exactly this problem, with companies warning about higher costs, uncertainty and difficulties adjusting supply chains.
The Whirlpool example
Perhaps one of the most revealing examples is Whirlpool.
Its Amana refrigerator plant in Iowa was once employing around 2,000 people. By this year, more than half those jobs had disappeared, with further cuts announced.
That is partibelf as a net beneficiary.
Yet the company has also been dealing with higher costs for steel and imported materials and a weak housing market. Reuters reported that only one of the plant's five assembly lines remained operational.
That tells us something important.
A tariff can protect one part of an American manufacturing business while increasing costs somewhere else in the same company.
It also demonstrates why simply counting new factories or new American investment does not give the whole picture.
Who actually pays?
Imagine an American company importing a component for $100. A 25% tariff turns that into a $125 cost before the company has even paid for transport, wages, electricity, premises and everything else involved in producing the final product.
The company may increase its selling price to $125 or more. If customers are unwilling to pay, it has to absorb some or all of the cost.
If competitors are facing the same tariff, the whole industry may raise prices. If the company is competing against an American producer that does not use imported components, the tariff can make the American importer less competitive.
This is why tariffs can produce some very strange results.
The government may be trying to protect American manufacturing, while simultaneously making it more expensive for American manufacturers to manufacture things.
Some companies are winning
It would be wrong to portray tariffs as an unmitigated disaster. American companies that compete directly with imports can benefit when foreign products become more expensive. Some businesses have also taken the opportunity to invest in domestic production.
Ford's decision to move some Lincoln production from China to America is a good example. And that is precisely the economic mechanism Trump wants to encourage.
The problem is that building a new American factory takes years. The higher tariff arrives immediately.
There is therefore a period when American consumers and businesses can face higher prices before any new domestic capacity appears.
Then there are the bankruptcies
American corporate bankruptcies rose significantly in 2025, reaching their highest level since 2010, with tariffs identified as one of the pressures affecting import-heavy manufacturers and industrial companies.
But this needs to be treated carefully. It would be wrong to claim that Trump's tariffs have caused a particular number of bankruptcies.
Companies fail for many reasons. High interest rates, excessive borrowing, weak demand, inflation, changing consumer habits and poor management can all play a part.
Tariffs can be the final problem for a company that was already struggling without necessarily being the sole cause of its failure.
That distinction matters.
The hidden cost is uncertainty
Perhaps the biggest problem for business is not even the tariff itself.
It is uncertainty. A company deciding whether to build a new factory might have to estimate its costs for the next 10 or 20 years. But if tariff rates can change suddenly, suppliers can be hit by new duties and trading partners can retaliate, making that calculation much harder.
The latest example is copper. The Trump administration has been considering further tariffs on refined copper, but Reuters reported this week that a decision has been delayed partly because of concerns about the effect on American manufacturers. The US relies heavily on imported copper and has only two operational smelters.
That illustrates the dilemma perfectly. America wants more domestic copper production. But putting tariffs on imported copper before there is enough American production could simply make copper more expensive for American construction, electronics and manufacturing companies.
The bill can move around the economy
There is another important point. Even when a tariff protects an American producer, the cost does not necessarily disappear. It can move from the importer to the manufacturer, from the manufacturer to the retailer and from the retailer to the consumer.
Eventually somebody has to pay.
That helps explain why the US Chamber has warned that broad tariffs can raise prices for both businesses and consumers and disrupt supply chains.
There is also the possibility of retaliation.
If America puts tariffs on another country, that country can put tariffs on American exports.
An American farmer may then discover that the tariff designed to protect an American factory has made it harder to sell his own products overseas.
That is one reason trade wars can become much more complicated than the original tariff announcement suggests.
A remarkable number of businesses have been involved
There is another indication of how widespread the issue has become. After the US Supreme Court ruled that Trump's earlier use of emergency powers to impose broad tariffs was unlawful, the US government began the process of refunding tariffs already collected.
The government had collected an estimated $166 billion under the affected tariff system from more than 330,000 businesses.
Those businesses did not necessarily all suffer financially. Some will have passed the costs to customers, some may have absorbed them and some may ultimately receive substantial refunds.
But the number demonstrates just how deeply tariffs can reach into the American economy.
So are Trump's tariffs working?
The honest answer is that it is too early to give a simple yes or no.
There are American companies investing in domestic production because tariffs have changed the economics.
There are others facing higher costs, weaker demand, reduced production and job losses.
Whirlpool is an especially awkward example for the administration because a company that supports the policy has nevertheless seen substantial job losses at one of its plants.
The real test will be what happens over several years.
If tariffs encourage enough investment to create competitive American industries, the policy may eventually produce some of the benefits Trump promises.
But if American companies simply face permanently higher input costs, consumers pay more, exports suffer from retaliation and investment is delayed because nobody knows what the next tariff will be, the result could be very different.
The important lesson is that there is no such thing as a free tariff.
It can protect one American business while hurting another.
It can create jobs in one town while eliminating them in another.
And it can encourage a new factory while simultaneously making the materials needed to build and operate that factory more expensive.
Trump is effectively conducting a huge economic experiment across the American economy.
The question is no longer whether tariffs have winners and losers.
They clearly do.
The question is whether, when the bill is finally added up, the winners will outweigh the losers.