The State of Americans' Views on Tariffs: An Initial Assessment

President-elect Donald Trump placed tariffs firmly in his pantheon of campaign-trail promises, at various times promising 10% or 20% across-the-board tariffs, 60% tariffs on China, and tariffs on Mexico ranging from 25% to 100% depending on its compliance with his vision for the U.S.-Mexico border. 

Voters take Tariff Man at his word

A majority of U.S. voters think Trump will enact 10% blanket tariffs, and a plurality think he will enact each of the other proposals. Republicans are unsurprisingly even more credulous, with majorities saying they believe Trump will enact each of the floated plans.

Voters do not have a unified understanding of tariff mechanics

Voters nevertheless do not have a clear understanding of the mechanics of who pays a tariff, which is essentially a tax on imports. Generally speaking, a U.S. firm that is importing foreign goods would pay the cost of any tariffs due to the U.S. government. But 35% of U.S. voters believe that foreign companies exporting goods to the United States are responsible for paying them, rising to 42% of Republicans, compared with only 27% of Democrats. By contrast, a higher share of Democrats (34%) identified that tariffs are fees paid by U.S. importers, compared with only 18% of Republicans.

Voters believe they’ll foot the bill as consumers

But the entity that pays the government may not ultimately be the one bearing the cost. Regardless of who pays the tax to the U.S. government, voters believe that U.S. consumers will be the ones to foot the bill. A near-majority (45%) of voters, and over a third of Republicans, identified domestic consumers rather than companies or foreign governments, as those who would ultimately bear most of the cost.

More voters think lower universal tariffs would be better for the economy than higher targeted tariffs

Despite many voters’ assessments that the cost of the proposed tariffs will fall on U.S. consumers, voters think that some proposals are more likely to benefit the U.S. economy than not. In particular, the idea of blanket 10% tariffs is viewed most favorably, with 46% saying those would be “very” or “somewhat” good for the economy. A 20% universal tariff rate leaves voters more ambivalent, with the difference between those anticipating positive and negative impacts on the U.S. economy within the margin of error. Conversely, more voters than not anticipate a negative impact from higher, non-universal tariff proposals — such as 60% tariffs on imports from China, or 25% tariffs on imports from Mexico — with the difference falling outside the margin of error. In our view, this suggests that voters are focusing on the percentage of the tariff when unable to calculate the true cost when comparing blanket tariffs versus a tariff on a single large import market like Mexico or China.

U.S. voters decisively say tariffs are used for economic protectionism 

Voters view tariffs through the lens of economic protectionism: A plurality (35%) of Americans say the United States imposes tariffs primarily to protect and help U.S. industry grow for economic interests, compared with far fewer (13%) who cite a national security rationale. Voters are least likely to think that the government uses tariffs to raise government revenue or correct trade deficits.

Voters’ belief in tariffs as a tool of blatant protectionism flies in the face of the Biden administration’s professed “small yard and high fence” approach to economic statecraft vis-a-vis China in particular, which largely aimed to limit the use of export controls and investment screening to protect industries important for national security, like semiconductors or advanced battery technology. But voters’ views here also potentially explain why the administration was so timid on promoting trade openness, both keeping (and expanding) Trump’s tariffs on China and eschewing muscular trade negotiations that would have granted market access, albeit reciprocally. 

Views of the existing U.S. tariffs on China offer signposts for how these dynamics could play out come January 

Americans’ views on the existing tariffs on China are instructive when it comes to how multifaceted views could play out in the context of the Trump administration’s proposals, specifically when it comes to public support for tariffs that are perceived as benefiting the U.S. economy: In short, even if consumers see tariffs in a negative light, they may nevertheless support them if they believe they benefit the U.S. economy on the whole. In the context of the existing tariffs on China, more U.S. adults than not think the tariffs are detrimental to their own and consumers’ well-being, but good for the overall economy. The issue is highly polarized: Republicans generally say that the current China tariffs are beneficial on all fronts, while Democrats on balance think the opposite. But a majority of Americans on both sides of the aisle still say they want to keep them in place.  

While contradictory on the face of it, these data points suggest that voters believe in the utility of tariffs to protect jobs and industries even if they hurt consumers, and are mentally balancing this perceived plus against the fact that as consumers, they would potentially face greater household expenses if additional tariffs are imposed. This questionable mental arithmetic could also help explain why the perceived benefits of tariffs for the U.S. economy decline as a function of the proposed tariff rate, regardless of whether they are targeted or across the board — consumers may simply infer that a higher tariff rate means the cost to them will outweigh the benefits they think tariffs have for preserving U.S. industry and jobs. 

In general, research has shown that consumers are more prone to notice the acute negative impact of free trade, such as the risk of job loss from a factory closing down, than the diffuse positive effects, like prices for all goods they buy slightly decreasing. And the reverse is also true. If people perceive tariffs as helping protect their jobs, they are less likely to shift their views based on cost of living increases. Attribution is also an issue. If a factory is offshored to China, consumers can clearly blame globalization, whereas if prices decline across the board, the cause may be harder to pinpoint.

What comes next?

Looking ahead, many experts predict that president-elect Trump will in fact be able to use the levers of his office to impose tariffs as he sees fit. Trump is a tariff true believer, advocating publicly for tariffs on Japan in the 1980s. The combination of the will and the way leads us to side with voters in generally believing that major additional tariffs are forthcoming. U.S. corporations are meanwhile preparing by stockpiling intermediate goods and considering relocating some of their production. They have also cited plans to pass costs on to consumers. In our view, this is the right approach for companies to pursue.

Forthcoming research anticipated for December will investigate U.S. consumers’ understanding of and views on retaliation risks emanating from U.S. trading partners, trade diversion, and whether informing consumers of the estimated additional household expenses arising from the Trump administration’s tariff proposals affects their support for them.