Higher prices, extra jobs: Lessons from Trump’s washing machine tariffs
Published On Dec 4, 2024, 1:50 PM
The article discusses the impact of Donald Trump's 2018 tariffs on imported washing machines, initiated to protect American jobs and manufacturers like Whirlpool. The tariffs resulted in a significant increase in the cost of laundry equipment—34% over five years—much more than other appliances (23%) and overall inflation (21%). Although the tariffs did create some jobs (approximately 2,000), the cost per job was extraordinarily high (~$815,000). When the tariffs expired, prices decreased sharply, demonstrating that while some U.S. manufacturing benefited, consumers faced considerable price increases during the tariff period.
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The price increase during the tariff period highlighted the consumer burden that tariffs can impose. As the tariffs have ended and prices for washing machines fell, companies that relied on higher domestic prices may face revenue challenges. Investors should be cautious of sectors tied to domestic manufacturing that previously benefited from protectionist policies but may now see decreased demand or revenue due to returning competition and lower consumer prices.
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