The Cost of Forever Trade Wars

By Kevin D. Williamson

Friday, May 08, 2026

 

Donald Trump campaigned against open-ended wars but as president has launched at least two of them so far: his unconstitutional war on Iran and his unconstitutional war—possibly more consequential in the long term—on the U.S. economy.

 

Trump may have lost his tariffs case in front of the Supreme Court, but his destructive, costly, and idiotic campaign against low prices continues.

 

The administration is seeking novel legal authority—much of it implausible—to keep up some version of the import taxes Trump had imposed under the 1977 International Emergency Economic Powers Act (IEEPA) until the 6-3 ruling in Learning Resources Inc. v. Trump clarified for the administration the question, supposedly tricky, of whether a law that does not so much as mention tariffs gives the president the unilateral power to effectively rewrite the U.S. tax code on the fly according to his own liking. And so tariff rates were adjusted in response to such world-shaking events as a few words of criticism from the prime minister of Switzerland, a person who does not—I am still convinced this part matters, at least a little bit—actually exist.

 

After IEEPA was taken away from him, Trump took up Section 122 of the Trade Act of 1974, which authorizes the president to impose global tariffs in response to a serious balance-of-payments crisis, which, like the prime minister of Switzerland, does not actually exist. A balance-of-payments crisis is what happens when a nation cannot pay for its imports or service its debt—we may very well get there one day, if current levels of spending continue, but we are not in such a crisis at this time, and Trump’s citing of the 1974 law is, like almost everything he does in such a vein, purely pretextual. Citing another pretext—national security—Trump plans to increase tariffs on automobile imports from the European Union to 25 percent under Section 232 of the Trade Expansion Act of 1962.

 

Americans are very irritated by high prices right now. Tariffs contribute to higher prices in obvious ways—U.S. importers facing enormous new taxes thanks to Trump are passing on those expenses, either to business partners or to end-point consumers, to the extent they are able to do so—but tariffs also contribute to higher prices in more subtle ways.

 

“When there are tariffs on building inputs, that makes houses more expensive,” says Daniel Anthony, who owns Trade Partnership Worldwide, a trade research firm, and also founded We Pay the Tariffs, an advocacy group for businesses and consumers suffering under these heavy new taxes. Anthony continued:

 

What you might not necessarily think about, though, is that if the cost of replacing your house goes up, then your insurance company should be charging you more, because it will cost more to rebuild that house today than it would have when you bought it. Tariffs seep into things in unexpected ways—there’s home insurance, but also car insurance: When all the replacement parts for a car are subject to a 25 percent tariff, then the mechanic’s bill goes up. If cell phones are subject to new tariffs and cell towers are more expensive to build because of steel tariffs, then you should expect higher monthly costs on a phone contract. No company is going to just say, “We don’t like the policy, but, out of our own goodwill, we’ll absorb the costs ourselves.” That isn’t how it works.”

 

Some businesses absorb losses in the short term because they do not have another attractive option, but, like any other tax, tariffs change business behavior in the long term. “The longer a tariff stays in place, the likelier it gets passed on to U.S. consumers,” Anthony says.

 

As a trade specialist and longtime tariff-watcher, Anthony has a front row seat and a gimlet-eyed view of the ways in which Trump’s tariffs are distorting the U.S. economy and making it less efficient. Some importers, such as smaller firms that bring in heavy equipment for resale to manufacturers and other industrial users, have suffered the unhappy experience of seeing tariffs on their goods increase radically after a sales contract has been signed but before the goods have crossed the U.S. border, reducing their profits on those sales or even forcing them to eat losses. Anthony reports that some of the firms he works with have tried to reduce that risk by making smaller orders that can be delivered via air freight rather than making larger orders that spend 60 days at sea on a container ship. “You pay more per unit for the smaller orders, and air freight costs more than ocean freight. That doesn’t show up as a straight tariff cost, but it makes everything more expensive.” He has little patience for what he calls Trump’s “fig-leaf” tariff justifications.

 

Trump indulges himself in a great deal of blustery—and fundamentally stupid—talk about how tariffs are paid by foreigners and put billions of dollars into the U.S. Treasury, but, where the rubber meets the road, the administration knows better. For example: The United States is an energy powerhouse and a net petroleum exporter, but the country also imports fuels such as gasoline and jet fuel as well as substantial amounts of crude oil. These products are exempted from tariffs for the obvious reason that Americans really, really hate high fuel prices. I do not buy protectionist arguments in almost any case, but, if we are shopping for pretexts, the national security case for fortifying the U.S. energy industry is a heck of a lot stronger than is, say, Marco Rubio’s risible insistence that protecting the fat profits of his sugar industry patrons down in Florida ought to be considered a national security priority. Leave it to the Trump administration to have a secretary of state whose sugar daddies are literally in the sugar racket.

 

In Iran, the Trump administration’s main goal appears to be opening the Strait of Hormuz, which was open before the president launched his illegal, unauthorized war against Tehran—which is to say, the White House’s main goal at this point in the war is eliminating a problem that the war itself created. Likewise, the president and his advisers—and elected Republicans across the country—clearly are spooked by rising prices, which are, in part, the entirely foreseeable if unintended consequence of Trump’s anti-trade policies. Tariffs are, after all, premised on the moronic view that foreigners are conspiring to victimize hapless American consumers by providing them with goods they desire at prices that are, in the president’s surely well-informed judgment, too low.

 

In April 2025, Donald Trump declared war on low prices. At the moment, that is the only war he is winning.