In 2009, American tire makers persuaded the Obama administration to impose tariffs on Chinese tires, and imports of tires from China fell sharply. But Chinese companies did not stop making tires in response to the tariffs — they simply moved production to other places, including to the United States.
Giti, one of the largest tire makers in China, built the South Carolina factory to make low-cost tires for Walmart. Two other Chinese tire companies are building plants in the neighboring states of Georgia and North Carolina, and a fourth Chinese company acquired a tire factory in Georgia this year.
Mr. Trump on Monday said the United States would begin imposing tariffs on another $200 billion worth of Chinese goods on Sept. 24, on top of the $50 billion worth of products he previously taxed. The new tariffs hit many of the consumer products that Americans use every day, like food, clothing and electronics, and the president threatened to go even further, saying he is prepared to tax all Chinese imports if Beijing retaliates.
The president also has imposed tariffs on steel and aluminum imports from most foreign countries, and has threatened to tax imports of cars and car parts.
Tariffs are taxes ultimately paid by American consumers, in the form of higher prices. The purpose of a tariff is to raise the price of imports above the price of the domestic alternatives. The bill for this method of protecting domestic jobs is paid disproportionately by lower-income households. And it is often very large.
One study of the Obama tire tariffs found in a single year, 2011, Americans spent an extra $1.1 billion on tires as a result of a tariff that preserved, at most, 1,200 jobs. That is almost $1 million per job, for jobs paying an average of about $40,000.
Steel tariffs imposed in 2002 by President George W. Bush yielded similar results, penalizing not just consumers but companies that use steel to make other products, like construction companies and carmakers. The Dartmouth economist Douglas Irwin estimated 140,000 American workers make steel, while 6.5 million workers make products that include steel.
“If for some reason you said, ‘We just want to help steel producers, shareholders, possibly steel workers,’ it makes sense,” Mr. Irwin said. “If you care about manufacturing employment or the manufacturing sector, it doesn’t make sense.”
The political counterargument for tariffs is that change is painful. Workers who lose jobs may struggle to find new ones; communities that lose factories may crumble. Mr. Trump has presented tariffs as an effective prophylactic, arguing that import taxes will protect American workers and companies.
But the United States’ tire tariffs — and similar efforts by past administrations to tax everything from socks to solar panels — have generally failed to protect existing factories and jobs. The Chinese factories in the Southeast will create new jobs for American workers but, in effect, the tariffs are simply moving jobs from one place to another at a very high price.
The Reagan administration’s 1981 deal with Japan to restrict auto imports helped to catalyze the production of Japanese cars in the United States. Honda, an upstart manufacturer assigned a relatively small import quota, arrived first, opening an automobile factory in Marysville, Ohio, in 1982.
One of the few studies on the subject found 19 percent of foreign companies hit with United States tariffs during the 1980s responded by investing in the United States.
While presidents between Ronald Reagan and Mr. Trump imposed fewer trade restrictions, the pattern continued. The Clinton administration restricted imports of Fuji film in 1993. Three years later, the Japanese company opened a plant in Greenwood, S.C.
The tire industry offers a more recent example. The Obama administration imposed tariffs on Chinese car and light-truck tires for three years in September 2009. Chinese imports had surged, and several American factories had closed.
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