Tariffs Helped a South Carolina Town. They Left American Shoppers Worse Off.

Trump’s first-term tariffs led Samsung to invest in a washing machine factory, which gave Newberry a boost. They also pushed up prices of washers for consumers.

By Chao Deng of The WSJ. Excerpts:

"Economists say tariffs can spur foreign companies to set up factories inside the U.S. and can help protect American businesses, which might also then take steps to invest in domestic manufacturing.

The downside of tariffs is higher prices. Both foreign and domestic producers tend to pass along costs to consumers that often result from tariffs, like higher import or U.S. labor costs." 

"“Tariffs can raise output of a particular sector, but it’s usually offset by a loss somewhere else,” said Ed Gresser, vice president at Progressive Policy Institute and a former economist at the U.S. Trade Representative."

"The tariffs may have led to an additional 1,800 washing machine jobs created by Samsung and other firms. But price increases caused by the tariffs cost U.S. consumers about $1.5 billion annually, according to a study in the American Economic Review, or more than $800,000 per job created.

Even if there were twice as many jobs, it’s a massive sum,” said Felix Tintelnot, a professor at Duke University and one of the study’s authors. 

The study found that the tariffs imposed in January 2018 triggered a nearly 12% rise in washing machine prices that year, or roughly $86 to $92 per washer."