Why does Trump want tariffs? Here’s what he has said about U.S. imports.

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President Donald Trump is expected to announce sweeping new tariffs Wednesday, which he has dubbed “Liberation Day.”

The move comes after the administration has already imposed or announced tariffs on steel and aluminum imports and some products coming from China, Mexico and Canada.

Critics of the proposals say tariffs are a tax ultimately paid by American consumers, as importers or final retailers hike prices to compensate for the levies they are charged. It’s unclear what goods and countries will be included in the new round of import duties – and the uncertainty has rattled markets.

But Trump has praised import duties — calling tariffs a “beautiful word” — and has suggested they can help raise public revenue, promote American products and jobs, and serve as a bargaining chip to extract concessions from other countries.

“They’re about protecting the soul of our country,” Trump said during an address to Congress in early March. “Tariffs are about making America rich again and making America great again.”

“There will be a little disturbance, but we’re OK with that,” he said. “It won’t be much.”

Trump has also said tariffs are needed to rebalance the global trading system, which he blames in part for the loss of U.S. manufacturing jobs. He has also suggested that products coming from abroad are “uninspected” and that the United States has enough companies to end its reliance on global supply chains.

“American businesses will no longer prop up failed foreign economies through extortive fines and taxes,” one White House memorandum from February said.

Protect American jobs and localize supply chains

The Trump administration has said a flood of imports threaten some U.S. industries. By extension, taxing those products could incentivize companies to open production lines or factories in the U.S. to avoid the tariffs.

“We just want to protect our businesses and our people. And they will come because they won’t have to pay tariffs if they build in America,” Trump said during the March address.

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But most trade experts say many industries are so automated that reshoring production adds few jobs.

“We have these romantic images of a Bruce Springsteen song with a lot of workers, blue-collar workers, sweating away at the steel mill,” said Douglas Irwin, an economics professor at Dartmouth College. But today, much of the work is done by equipment overseen by an engineer, he said. “In the 1980s it took about 10 worker hours to produce a ton of steel. Today, it takes one worker hour to produce a ton of steel.”

The knock-on effects of tariffs can also negate job gains, some studies have found. For every job making steel, for example, there are 80 American jobs that use steel – which could be threatened if steel prices increase precipitously, said Michael Klein, a Tufts University professor of international economic affairs and founder of the publication EconoFact.

“If you make steel more expensive, you might help that one steelworker, but you’re putting at peril the other 80 workers who are making refrigerators, washing machines and cars,” he said.

Penalize other countries

Trump has threatened to impose tariffs on goods from Mexico, Canada and China, saying they’re not doing enough to stem the flow of undocumented immigrants and fentanyl across U.S. borders.

“They have allowed fentanyl to come into our country at levels never seen before,” he said in the March address.

“Millions of people flowed into our country through Mexico and Canada. And we’re not going to allow that,” Trump said in February remarks to reporters. “This is going to be what pays down the $36 trillion in debt and all the other things,” he said later that month.

Only 43 pounds of fentanyl were seized at the northern U.S. border in the last fiscal year, according to Customs and Border Protection data, compared with more than 21,000 pounds along the southwestern U.S. border, according to that data. Precursor chemicals to fentanyl have sometimes been sent through the mail to Mexico from China, according to the U.S. International Trade Commission and the U.S. Drug Enforcement Administration.

Meanwhile, illegal border crossings from Mexico into the United States, as tracked by U.S. Customs and Border Protection, have dropped since Trump was inaugurated; they began trending downward in 2024, after spiking at the end of 2023.

Some trade experts say the downside of using tariffs as a threat is that other countries then retaliate, hurting U.S. companies. Alcohol, for example, has been at the heart of the recent nascent trade war partly because the industry has such strong American brands. Some Canadian provinces have stopped stocking U.S. bourbon and whiskey, and the country has imposed a counter tariff on U.S. goods.

Countries looking to retaliate against the United States often tax agricultural products because it’s relatively easy to find alternate sources, Irwin, the Dartmouth professor, said.

“If you were to impose a tariff against Boeing, you really only have Airbus, but soybeans are soybeans, and wheat is wheat,” Irwin said. “If you don’t buy from the U.S., you buy from Canada.”

Fund the government

While campaigning, Trump floated the idea of replacing the federal income tax with tariffs. More recently, White House aide Peter Navarro has said Trump administration tariffs could bring in more than $6 trillion in revenue over the next 10 years, although it’s not clear how he reached that figure.

To be sure, tariffs were a notable part of the U.S. revenue stream in the 1800s. But back then, the government was much smaller, and the U.S. didn’t consistently levy an income tax. Today, customs duties make up about 2 percent of federal revenue.

Some trade experts also say it’s difficult to rely on import taxes for revenue because consumer demand may go down as tariffs go up – eating into the revenue generated. And revenue generated from import taxes could be offset by damage done to U.S. industries.

For example, after China imposed a retaliatory tariff on U.S. agricultural exports during Trump’s first term, those exports decreased by nearly $26 billion through 2019, according to the Agriculture Department’s Economic Research Service. The administration later authorized more than $20 billion in payments to help American farmers during that time.

“Any revenues that were raised [by America’s initial tariff] were depleted by trying to cushion those who were hurt by retaliation,” said Klein, the Tufts professor.