August 20, 2025

In the age of global interdependence, trade wars are no longer isolated skirmishes between governments—they ripple through every layer of society. The United States, often the initiator of tariff wars, has found itself grappling with unintended consequences that strike at the heart of its economy. Of course, they might not admit it, or they may have a completely contrary view of the whole world. Any country frames the tariffs as tools to protect domestic industries, assert geopolitical leverage, and run the political agenda. However, it may have long-term effects that often boomerang back to hurt the very people and businesses they aim to shield. This discussion explores the multifaceted impact of tariff wars on the US economy, industries, and everyday citizens. But before we deep dive into this topic, I would strongly recommend you first read the blog What Is a Tariff War? – PolyBlogger.com. This will give you an idea about how the tariff can be weaponized in global politics. Though I have created this blog keeping the USA as an example, it is certainly not to demean the beloved country, the USA. Also, the current tariff war is between the USA and the rest of the world. But in future, this may happen between different countries. It has happened with the EU and Russia recently, and the consequences may remain the same with a few differences. From rising consumer prices to disrupted supply chains, we’ll uncover how protectionist policies in business and relations can ironically weaken the nation, political ties, trust, and other key aspects they’re meant to strengthen. Impact on American Consumers Rising Prices across the Board Tariffs are taxes paid by importers, who then pass those costs onto consumers. When the US imposed tariffs on Chinese electronics, machinery, and consumer goods, prices for everyday items—from smartphones to washing machines—began to climb. It is obvious that consumers are the sufferers of tariffs, taxes, duties, inflation, technological change, climate change, government change, etc. The most vulnerable is the consumer. I understand patriotism plays a key role in diverting the minds of the people of the country. When you want something to be accepted by the people, play the patriotism game. China often plays this game to hide internal unrest. Please study the examples below to understand how prices have risen in the USA. Now imagine if the government imposes a 50% tariff on the goods from a particular country. The prices will rise by that amount. Who is going to pay for that? What if the prices increase for any critical goods like medicines? Now the catch is, if the USA is importing any critical goods, it may give concessions to those goods. But then this is purely out of selfishness. What if a country exporting those goods to the USA, stops the exports OR increases the prices further, to match the prices after 50% (or whatever the percentage of tariff is) tariff. For example, a medicine costing $10 is excluded from the tariff and remains cheaper in the USA. But if the country exporting that medicine increases the price by 50% to $15, now, which matches the after-tariff price. Even if the USA wants to act selfishly for its nation, it cannot do so because the people of America may have to pay an increased price. The United States, here, clearly has put itself into trouble. Exporters may play the same dirty game for every such ‘concessional’ goods.  Reduced Product Variety Tariffs can discourage foreign companies from selling in the US market. At the same time, it reduces the variety of products available to consumers across a range of prices, features, and quality. This scenario is especially noticeable in sectors like electronics, clothing, and automotive parts. Even if the products are available, they generally become costly. Inflated prices generally do not settle after tariff war ends The general policy for raising the prices of the services that the government offers is – Impact on U.S. Industries Manufacturing Sector: A Double-Edged Sword While tariffs are intended to protect American manufacturers, they often backfire due to the complexity of global supply chains. Agriculture: Collateral Damage American farmers were among the hardest hit during the U.S.-China trade war. China responded to US tariffs by slapping duties on soybeans, pork, and other agricultural products. This scenario is like increasing the tariff, facing the increased tariff on exports in retaliation, and spending the earned tariff on subsidies. What are you trying to achieve? Do you have a clear idea of this? Are you sure that whatever idea you have will work in your favour? Why is there ego and insecurity, if a country is doing well for its people? Tech and Electronics Many US tech companies rely on Chinese components and assembly and Taiwan for semiconductors. Tariffs disrupt supply chains, increase production costs, and delay product launches. To a greater extent, the USA has already suffered this. Impact on Small Businesses Small businesses often lack the resources to absorb tariff-related cost increases or reconfigure supply chains. The most vulnerable businesses are small businesses. They get the hit very early, faster, and harder as well. They generally have limited or no backup. Their finances and reach to the broader markets are limited. Impact on Employment Tariff wars can lead to job losses in sectors that rely heavily on imports or exports. Import-export businesses are so sensitive in nature that even the most minor geopolitical change may affect them very easily and hardly at all. Especially when the exchange rate changes due to the government’s strategies and planning, such businesses are badly affected. Hedging in the ‘FX’ is one option, but it is helpful in stable policies, not in volatile markets. The first thing that happens in businesses during such bad conditions is job cuts. Other remedies come later. According to the Peterson Institute for International Economics, the U.S.-China trade war may have cost the US economy over 300,000 jobs. Now that the USA is imposing tariffs on many countries, imagine the rate