All the world’s a stage, and all the tarrifs, theater

“Trade wars are good, and easy to win,” a world leader famously tweeted in 2018 . Fast forward to 2025, and that bravado looks painfully naïve. The modern flurry of tariff wars — from Washington’s battles with Beijing to Britain’s Brexit bravado — has done little to protect jobs or industries. Instead, these trade skirmishes preserve outdated economic myths and serve up performative nationalism for domestic applause. In reality, tariff wars have become costly theater, inflicting job losses, supply chain havoc, and higher prices on the very nations they purport to defend. Business leaders, take note: the tariff war is a war on economic sense, and it’s time we call it out.

Tariffs are always sold as shields — saving factories, rescuing jobs, fixing trade deficits. The U.S.—China tariff war was pitched exactly this way. Yet the numbers tell a sharply different story. After waves of tariffs since 2018, American consumers and companies have paid an estimated $51 billion (0.3% of GDP) in extra costs, effectively a tax on themselves. Multiple studies confirm these import taxes were entirely passed on as higher prices in the U.S. And what did Americans get in return? Not a manufacturing renaissance. Instead, up to 245,000 fewer jobs existed at the peak of the trade war, and overall U.S. growth took a hit. Economists warned from the start that more jobs would be destroyed than saved — and they were right.

Consider the 2018 steel tariffs. U.S. steel mills did see a brief bump in employment (about a 6% rise), but industries using steel as an input shed far more jobs. A Federal Reserve study found manufacturers exposed to these tariffs had lower employment than they would have without the tariffs. Another analysis estimated as many as 75,000 fewer manufacturing jobs resulted from the higher metal costs. It’s the classic protectionist backfire: a policy meant to “bring back” one narrow sector ends up sacrificing larger sectors downstream. As one report dryly noted, “tariffs can create significant costs to consumers,” and any gains are often “not sustained for long.” 

The tale gets even more absurd with the washing machine tariffs of 2018. To protect a handful of U.S. appliance jobs, hefty tariffs were slapped on imported washers. Yes, about 1,800 U.S. jobs were created as Samsung and LG opened U.S. plants. But washing machine prices jumped ~12%, including domestic brands that opportunistically hiked prices. Consumers paid an extra $1.5 billion — which works out to over $800,000 per job created. It’s hard to imagine a more expensive way to create a manufacturing job. As a result, the cost-benefit outcome “did not meet expectations.” (If any CEO proposed a $800k-per-job scheme, they’d be laughed out of the boardroom.)

Even the trade deficit, a key justification for tariff offensives, hasn’t shrunk — it’s ballooned. The overall U.S. trade gap hit a record $948 billion in 2022, nearly $1 trillion and the largest ever. America’s deficit with China, the supposed villain of the piece, actually grew to $383 billion. Tariffs shuffled some supply chains — U.S. imports from China fell over 30% on tariffed items — but Americans simply bought more from Vietnam, Mexico, and others. Net effect: the trade gap didn’t vanish; it migrated. By 2023, U.S. importers were paying higher costs to buy from new sources, while China’s promised buying spree under the “Phase One” trade deal never fully materialized (China met only ~60% of its purchase commitments). So much for tariffs “winning” a better deal. In short, tariff wars haven’t cured trade imbalances — they’ve arguably made them worse, all while handing us the bill.

When protectionism backfires

Tariff wars don’t just fail to deliver; they often boomerang badly. In the U.S.—China clash, American farmers became collateral damage. After U.S. tariffs hit Chinese goods, Beijing retaliated by slashing purchases of U.S. soybeans, pork, and more. U.S. farm exports to China plunged by more than half in one year (from $19.5 billion in 2017 to just $9 billion in 2018). With crops rotting and prices tanking, farm bankruptcies jumped 20% in 2019. The irony? The U.S. government had to spend $28 billion (more than the cost of an aircraft carrier) on bailouts to placate angry farmers. In fact, over 92% of the tariffs collected from Americans went right back out to bail out farmers hurt by retaliation. So Americans paid tariffs at the store, then paid again as taxpayers to subsidize those hurt by the tariffs. It’s an absurd shell game — robbing Peter to pay Paul, with added bureaucracy in between.

Allies haven’t been spared either. When the U.S. imposed steel and aluminum tariffs globally, even close partners like Canada and the EU were hit. They retaliated in kind — famously slapping tariffs on iconic American products like bourbon and motorcycles. The result: global supply chains were thrown into disarray, and U.S. exporters in unrelated industries suddenly lost sales due to retaliatory duties. American whiskey makers, for example, saw exports to Europe slide when the EU’s counter-tariffs hit. The U.S. eventually walked back some of these ally-targeted tariffs (removing them on Canada, Mexico, and Europe by 2019-2021), tacitly admitting the policy hurt more than it helped. But by then, the damage — strained relations and higher costs — was done.

Across the Atlantic, Brexit has been another grand experiment in economic self-sabotage. Brexit proponents promised a renaissance of British industry freed from EU chains. The reality: new trade barriers, even without traditional tariffs, have suffocated UK-EU commerce under a pile of “red tape” and customs checks. British exporters face painstaking border formalities that didn’t exist before, making their goods less competitive in Europe. As a result, UK goods exports to the EU in 2023 were still 11% below 2019 levels (in real terms), never recovering to pre-Brexit volumes. Investment also took a hit as firms rerouted supply chains onto the continent. The UK’s own fiscal watchdog, the OBR, estimates that by cutting Britain off from its largest market, Brexit will ultimately leave the UK economy around 4% smaller than it would have been — a permanent dent in growth. Far from restoring an industrial golden age, Britain got labor shortages, supply bottlenecks, and the highest inflation in decades, partly exacerbated by trade frictions. The promise of “taking back control” turned out to mean more forms to fill, fewer markets to sell to, and no sign of the touted manufacturing boom. It’s protectionism by another name, and it’s biting back hard.

These case studies hammer home a consistent lesson: tariffs and trade barriers often backfire. They raise costs for domestic businesses, invite retaliation, and undercut exports. They may shelter one favored industry for a time, but at a steep cost to many others. In each instance — U.S. steel vs. steel-users, U.S. farmers vs. Chinese retaliation, British exporters vs. new trade hurdles — the supposed “cure” of protectionism ended up worse than the disease it aimed to heal.

The global economy has moved on

Why do tariff wars keep failing to deliver? A big reason is that they cling to an outdated view of the economy. The world has changed profoundly since the heyday of high tariffs and protected national industries. In advanced economies, services now account for roughly 70-80% of GDP, far outpacing manufacturing. You can slap a tariff on imported steel or furniture, but that does nothing to help (or harm) the software developer, the logistics consultant, or the healthcare company that actually drive modern growth. Our economies have transitioned toward knowledge, services, and innovation — sectors that don’t benefit from simplistic border taxes on goods.

Even manufacturing itself has transformed. It’s far more automated and capital-intensive than it was a generation ago. In the 1950s, making lots of goods meant employing lots of people; that’s no longer true. For example, thanks to automation and efficiency, producing a ton of steel now takes only 1.5 worker-hours, down from 10 hours in 1980. One steel mill worker today produces as much output as seven workers from the past. So even if tariffs manage to increase domestic production of, say, steel or washing machines, the job gains are a fraction of what they’d have been decades ago — a reality clearly seen in the modest, short-lived employment bumps of the late 2010s. As the Tax Foundation bluntly summarized, “manufacturing is highly automated… bringing production back home may result in much greater increases in output than employment.” In other words, you can’t tariff your way back to 1975. The assembly lines of old have been largely replaced by robots and algorithms.

Furthermore, the globalization of supply chains means no country can be an island in production. Take any complex product — a smartphone, an automobile, a commercial airliner — and you’ll find components and intellectual property from dozens of countries. Tariffs assume a simplistic world of “our stuff” vs “their stuff,” but modern trade is deeply interwoven. When the U.S. imposed tariffs on Chinese components, American manufacturers didn’t suddenly start sourcing 100% locally; often they couldn’t, because certain parts were only made abroad or would take years of investment to produce domestically. Instead, firms scrambled to rearrange suppliers (shifting to Taiwan, Vietnam, Mexico, etc.), incurring higher costs and logistical headaches in the process. Complex global supply chains don’t reorient overnight to suit political whims — and forcing them to do so with tariffs is like wrenching a Jenga tower and expecting it not to tumble. The COVID-19 pandemic starkly showed how fragile supply networks can be; adding deliberate trade barriers on top of that fragility is a recipe for disruption. Little wonder that manufacturers have repeatedly cited tariffs as a source of “demand confusion” and a drag on business confidence.

Crucially, many of the challenges workers face today have little to do with trade at all. Automation, artificial intelligence, and shifts to a digital economy are far bigger forces reshaping labor markets. A tariff can’t reverse the trend of robots replacing repetitive jobs, or the offshoring of certain services via the internet, or the decline of coal due to cheaper natural gas and renewables. By clinging to the narrative of industrial self-sufficiency, policymakers are fighting the last war — trying to resurrect an economy that no longer exists. It may be comforting politics to talk about “bringing back” old factory jobs, but it ignores how the world economy actually functions in 2025. Yes, every country wants robust industries and secure supply chains, and there is a valid debate on balancing efficiency with resilience. But blanket tariffs are a blunt instrument from a bygone era. They amount to treating modern economic ailments with quack remedies from the past — and the outcomes speak for themselves.

Economic theater in lieu of strategy

If tariff wars make so little economic sense, why do leaders keep turning to them? The answer lies in performative nationalism — tariffs make for grand political theater. They allow politicians to appear tough and patriotic, hoisting the flag of economic sovereignty, all with the stroke of a pen. It’s economic theater: highly visible action with minimal understanding of the consequences. Announcing a big tariff on imports plays well on the evening news — it’s visceral, simple, and feeds a narrative of “us vs. them.” Never mind that behind the scenes, domestic businesses are scrambling and foreign governments are plotting counter-moves; to the tariff’s architects, what matters is looking decisive for the hometown crowd.

Tariffs are the economic equivalent of a showy military parade — they project strength symbolically. But as with a parade, the substance can be hollow. In many cases these moves are more about political posturing than problem-solving. Protecting jobs and industries is a worthy goal, but tariffs offer a facade of doing so, not a genuine solution. It’s far easier to blame foreigners and levy a tax on imported goods than to tackle the harder work of upskilling workers, investing in new technologies, or crafting nuanced industrial policies. Tariffs are a shortcut that skips the heavy lifting, which is why they’re so tempting to deploy. As former U.S. Treasury Secretary Janet Yellen noted, many Trump-era tariffs “impose more harm on consumers and businesses” while failing to address the real issues with trading partners. In other words, they’re more smoke than fire.

We also see a certain economic nostalgia at play — a belief that turning back the clock on globalization will restore national greatness. This is myth-making. Yes, globalization created winners and losers, and not everyone was heard. But trying to rebuild imaginary walls in a deeply interconnected world often ends up hurting the very people it’s supposed to help. The U.S. trade war illustrated this painfully: it was touted as a fight for the American worker, yet American workers bore the brunt through higher prices and lost sales abroad. An analysis by the nonpartisan CSIS found Trump’s tariffs were essentially “a wash” — the trade deficit didn’t improve at all — and American companies and consumers paid almost all of the costs. Meanwhile, farmers facing retaliation “required tens of billions of dollars of assistance to avoid bankruptcy.” All that economic pain, for what gain? Largely for the optics of being “tough on trade.”

Business leaders have little patience for theater; they deal in results. And the results of recent tariff wars are dismal. Supply chains have been rerouted but not truly “reshored.” Inflation ticked slightly higher — by one estimate, removing the China tariffs could have shaved about 0.3 to 1 percentage point off U.S. inflation, a modest help when inflation was running hot. Relationships with allies were frayed and then hastily mended. Geopolitical tensions were inflamed, not eased. And not a single major economic challenge of the 2020s — from AI-driven job disruption to climate change to pandemic resilience — is solved by import taxes. Tariff wars, in the end, are a distraction masquerading as a solution.

Time to exit the stage

The evidence is overwhelming: contemporary tariff wars are exercises in preserving myths. They operate on the false premise that blocking foreign goods will inevitably boost domestic prosperity. In practice, they’ve amounted to economic self-harm — a form of nationalist grandstanding that leaves everyone a loser. From the U.S. and China to post-Brexit Britain, the pattern repeats: promises of revived industries, followed by the reality of higher costs, lost jobs, and bitter aftertaste.

It’s time we recognize tariff wars for what they truly are — performance art, not economic policy. They are loud, dramatic, and superficially satisfying to some, but they don’t solve our real problems. Our global economy has outgrown these 19th-century antics. Business leaders understand that competitiveness comes from innovation, efficiency, and human capital, not from fortresses of tariffs. Policymakers should focus on strategies that actually deliver: smarter trade agreements, worker retraining, R&D investment, coordinated supply chain security. Those may not grab headlines like a tariff announcement, but they pay dividends in the long run.

In the theater of tariff wars, we’ve watched act after act of the same play — Protecting Jobs in name, Preserving Myths in truth. It’s a play we can no longer afford to stage. The next time a politician thunders about new tariffs to save the economy, remember the lessons of recent years. Tariff wars are easy to start, impossible to win, and costly to all. In lieu of real solutions, they offer only the illusion of action. And as any savvy businessperson will tell you, illusion is a poor substitute for strategy. The curtain must fall on this economic theater. It’s time to exit the stage and move forward into a future based on reality, not rhetoric.

The modern world demands smarter answers than tariff tit-for-tat. After all the sound and fury of recent trade conflicts, one truth stands clear: in a tariff war, there are no winners — only the ghosts of outdated ideas, clung to by those too afraid to face the future. That is the real cost of this performative economic nationalism, and we can — and must — do better.