No, tariffs are not strengthening the economy

Testifying to Congress, United States Trade Representative Jamieson Greer argued that “President Trump’s trade policy is working.” The data present a different picture: President Trump’s trade agenda is actually holding back the economy. If we want to truly “become an economy based on producing real goods and services,” as Greer told Congress, ending the trade war for US manufacturers needs to be the highest priority. The outlook for the manufacturing sector — that part of the economy that tariffs were supposed to help — is bleak. Manufacturers continue to shed jobs (down 88,000 year-over-year) while productivity collapsed in the fourth quarter of last year, the opposite of what we would expect if tariffs were boosting productivity, as Greer alleges. And it’s factory owners themselves who are telling us this story. Manufacturing sentiment, a measure of how manufacturers feel about the growth prospects of their sector, remained negative for most of 2025. In fact, The Economist reported that manufacturers overwhelmingly reported negative sentiments when tariffs were mentioned, with no respondents reporting positive views. There’s little to suggest the manufacturing sector is clamoring for more tariffs. Notably, the administration seems to be focusing on production instead of prices, likely because the data show that tariffs are raising costs for consumers and businesses. Research from the Federal Reserve Bank of New York and other academics suggests that importers have borne about 90% of the tariffs, with about a quarter of that being passed onto final retail prices shoppers pay. This will continue to worsen if the tariffs stay in place. When businesses have to pay more for their manufacturing inputs, and consumers have to pay higher prices for imported goods or purchase higher-priced domestic alternatives, the economy slows. This is felt beyond just factories. More spending on tariffed goods means less spending elsewher