President-elect Donald Trump has promised a “manufacturing renaissance” upon his profit to the White House, pledging tariffs to bolster companies that make products within the United States. 

The concept is to drive up the worth of imported goods to make American-made products more appealing. Trump’s plans have been heralded by some domestic manufacturers competing against low-expense goods from countries like China, but economists alert tariffs can be a double-edged sword by driving up expense boost and profit rates.

“It does propose a assess of protection” for manufacturers, said Gary Schlossberg, global strategist at the Wells Fargo property Institute. But “depending on where you are in manufacturing, that (expense boost) could work against you.”   

Concerns over expense boost

Trump placed tariffs on solar panels, washing machines and sure metals during his first administration. President Joe Biden kept most of those tariffs in place and slapped recent tariffs on additional Chinese goods like electric vehicles and semiconductors. Now, Trump is proposing more aggressive tariffs ranging from 60% to 100% on Chinese goods and a universal tariff of up to 20% on imports from all other countries.

“We’ll navigator an American manufacturing boom,” Trump told voters during a September talk in Georgia. “When they have to pay tariffs to arrive in, but they have incentive to construct here, they’re going to arrive roaring back.”

The catch, according to economists, is that tariffs can navigator to higher profit rates and reignite expense boost. Autozone and Stanley Black & Decker have already said they would pass on increased operating costs to consumers.

The Peterson Institute for International Economics, a nonpartisan ponder tank, said the tariffs would expense a typical American household over $2,600 a year. Another update from the National Retail Federation, a retail trade throng, said the tariffs could expense American consumers between $46 billion and $78 billion in spending power each year. The worth of $50 athletic shoes would jump to as high as $64, and a $2,000 mattress and box spring set would expense anywhere from $2,128 to $2,190, according to the update.

“Most of us feel the tariff proposals are detrimental to the economy as a whole, even though they may advantage sure types of manufacturing at least for a period,” Schlossberg of the Wells Fargo property Institute said. 

Matt Bigelow, president of Vermont Flannel, said expense boost is a “real concern” for the apparel manufacturing business, which cuts and sews fabric imported from Europe to make shirts, robes and other products. 

“I ponder we’ve all, to a sure extent, experienced the result of expense boost over the last few years,” he told USA TODAY. “If tariffs do indeed ultimately boost buyer prices, then I ponder that is a concern.”  

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Stephen Liquori, founder and CEO of Massachusetts-based apparel manufacturer Goodwear USA, said Trump’s tariff plans would likely boost his business by raising prices on imported products and putting them on an “even playing field.” But he’s not convinced tariffs are a excellent concept, and expects those costs to be passed on to American consumers.

“There are a lot of things we can’t make or don’t make here and probably will never make. I’m realistic about that. I’m not going to declare, ‘Make everything in America.’ It’s a global economy,” he said.  

Optimism for recent jobs

Despite expense boost anxieties, some U.S. manufacturers are looking forward to expanded tariffs. 

“It’s going to be great for all the American factories throughout the United States,” said Drew Greenblatt, president of Marlin Steel, a wire and sheet metal products manufacturer that sources American steel.  

Trump’s 25% tariff on sure steel imports during his first administration didn’t assist Marlin Steel since it excluded fabricated steel from China, Greenblatt said, but he’s confident Trump’s next round of tariffs will be a boon. If tariffs play out the way he’d like, he anticipates needing to double his current staff of 115.  

“So many jobs I misplace because the worth-sensitive purchasing manager gives the job to the Chinese vendor rather than us,” he said. “I’m going to commence winning all those jobs. This is going to be very excellent for the American factory worker.” 

A universal 10% tariff could make 2.8 million jobs, according to one study from pro-tariff trade throng the Coalition for a Prosperous America. Another study from nonpartisan ponder tank the Brookings Institution in 2020 found tariffs during Trump’s first administration appeared to make several thousand jobs in the steel industry, but gains in manufacturing sectors competing with imports were “more than offset” by losses in industries that relied on imports or faced retaliatory tariffs on exports. 

Bayard Winthrop, founder and CEO of apparel manufacturer American Giant, said he’s in favor of rebalancing trade with China and other international trade partners through tariffs. He just wants to view it done methodically and mindfully. 

If Trump slapped on a universal 20% tariff on day one, “that would be devastating,” Winthrop said. But “I don’t ponder that’s where we’re going to land. I ponder where we’re going to land is a gradual boost over period of tariffs, and I ponder that posture I am supportive of.” 

After its launch in 2012, San Francisco-based American Giant has grown into one of the largest American clothing manufacturers, sourcing all of its materials from within the country. Winthrop said tariffs would be excellent for the business, but also assist boost the American middle class by offering more factory work. 

“(There will be) some boost in costs – that’s the worth you pay – but the advantage is it will commence to put in place some industrial capability in the United States that I ponder is desperately needed,” he said. “I ponder it’s needed for jobs. I ponder it’s needed for middle, industrial class and lower-talented workers all over the country.” 

Scott Paul, president of the Alliance for American Manufacturing, has also advocated for a continued “strategic application” of tariffs. 

“The concept of escalated tariffs on some Chinese products has merit, and if we’re looking to either decouple or derisk our economy from China, that’s an significant policy step we have to receive,” he said.