Trump says his trade war triggered job gains. Here's why that didn't happen.
Trump has vowed to escalate tariffs in a possible second term.
A sewing machine manufacturer in Ohio froze employee wages, a New York City-based wheelchair producer forced layoffs at a U.S. supplier and a drone seller in Florida struggled to offer pay increases and hire workers.
The companies were among hundreds who filed comments with the federal government over the negative consequences of tariffs put in place under then-President Donald Trump. Many of the businesses bemoaned sudden employment-related difficulties, government filings show.
Drone Nerds, the Florida-based firm, criticized the tariffs in a filing as "a dead-weight loss for the economy."
The challenges reflect findings in a series of studies that show the tariffs undertaken by Trump resulted in at best a neutral effect on U.S. employment and at worst a loss of hundreds of thousands of jobs, all the while raising prices for consumers.
On the campaign trail, Trump has vowed to escalate the trade war initiated during his first term. Such policies would spur employment in some industries acutely threatened by foreign goods but the overall result would be further job losses due to a rise in costs for companies across the economy, experts told ABC News.
"Some jobs would be created," Raymond Robertson, a professor of economics and government at Texas A&M University, told ABC News. "But it's going to come with higher prices and the market will adjust with lower demand for workers."
In response to ABC News' request for comment, the Trump campaign rebuked criticism of the tariffs, pointing to strong economic performance under Trump.
"It's no surprise that organizations funded by foreign outsourcers, globalist corporations, and Chinese business interests don't like President Trump's historic tariffs -- but the American people don't need made-up 'models' to know how much better our economy was under President Trump," Karoline Leavitt, the campaign's national press secretary, told ABC News.
"By cutting regulations and taxes and using the leverage of the United States to negotiate better trade deals around the world, President Trump built the strongest economy in American history," Leavitt added.
During his tenure, Trump placed tariffs on aluminum and steel from a host of countries, including Mexico, Canada and the European Union.
Meanwhile, he taxed hundreds of billions of dollars worth of goods from China, raising import costs for everything from shoes to BMX bikes to computer chips.
Trump's tariffs decreased U.S. employment by 166,000 jobs, according to a study from the nonprofit Tax Foundation, which cited an increase in import costs for U.S. employers. A separate study from the U.S.-China Business Council estimated up to nearly 250,000 lost jobs as a result of the tariffs.
The manufacturing sector drew special attention from Trump, who touted the potential for rejuvenating U.S. production.
However, in 2019, the Federal Reserve Board found that the tariffs had led to a 1.4% decline in manufacturing employment, which amounts to roughly 175,000 missing jobs that would've otherwise been created in the absence of the policy, Katheryn Russ, an economics professor at the University of California, Davis, told ABC News.
The primary reason for the job losses, experts said, owes to the increased costs for materials imported by U.S. firms, which in many cases raised prices to make up for the shortfall and in turn lost out on business. Retaliatory tariffs, which raised the prices paid for U.S. exports, also negatively impacted jobs, the experts added.
"What we know is that the tariffs increased costs for manufacturers," Russ said. "So overall they are associated with a decline in employment among manufacturers who used the goods targeted by tariffs."
Neel's Saddlery and Harness, a small seller of industrial sewing machines based in Lima, Ohio, suffered an immediate 20% drop in sales in 2018, after Trump placed tariffs on China-made sewing machines.
"Our prices had to go up and customers expressed dissatisfaction," Ryan Neel, the owner of the company, told ABC News. "It was very stressful."
In response to mounting losses, the company froze wages and ultimately laid off two of its six employees, Neel said. "I didn't tell them it was because of the tariffs," Neel added. "I said it was because we were losing business. But I think they could put two and two together."
To be sure, the tariffs have protected some industries vulnerable to cheap foreign goods, likely bolstering employment in those areas. A trade group representing steel pipe manufacturers and another advocating for wood flooring producers, for instance, defended the tariffs in comments to the U.S. International Trade Commission.
In the absence of the tariffs, "large quantities of unfairly priced Chinese imports of steel pipe would be likely to result in U.S facility closures and the loss of thousands of U.S. manufacturing and related jobs," the American Line Pipe Producers Association Trade Committee said.
President Joe Biden, for his part, has kept many of the tariffs in place.
Trump has recently vowed to expand the trade war if he takes office next year, promising to impose tariffs on most imported goods. Speaking with Fox Business in August, Trump said the tax on imported items could ultimately stand at 10%.
Earlier this month, when asked by Fox News' Maria Bartiromo whether he would consider implementing a 60% tariff on Chinese goods, Trump said: "No, I would say maybe it's going to be more than that."
Higher tariffs would protect some industries but the ultimate effect would be a deepening of the job losses caused by the initial round of measures, experts said.
"If we impose 60% tariffs, that will have significant adverse effects on U.S. supply chains, employment and prices," said Robertson, of Texas A&M.
Neel said his firm would likely go out of business under such tariffs.
"The immediate drop in sales would be tremendous and jobs would be eliminated," Neel said.
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