This week, the Trump administration levied sweeping high tariffs on most of the United States’ major trading partners. These tariffs are widely expected to be economically destructive, creating uncertainty, raising prices, and reducing growth. But less attention has been paid to the tariffs’ potential effects on workers’ opportunity for high-quality, family-sustaining jobs.

Evidence indicates that the economic shock created by the tariffs may have ripple effects for workers and further erode their economic security. If the tariffs harm workers, they risk undermining Americans’ confidence in the government, as broadly shared opportunity is a crucial element of a thriving democracy. Without it, workers are less likely to pursue civic engagement and to trust their government.

How we got here

Today’s tariffs reflect a backlash against an era of increasingly free trade. While the past several decades of international trade policy have contributed to overall economic growth, the benefits haven’t been shared evenly. As trade policy has reshaped labor markets, some workers were left behind, particularly those without a college degree.

In response, some policymakers have turned to trade restrictions to generate support, despite evidence illustrating how broad-based tariffs harm workers. Still, rising income inequality and broader social forces have led many Americans to blame trade liberalization for some workers’ diminished financial security.

How tariffs may reshape labor markets to harm workers

Though past trade liberalization did harm some workers, these harms will not be redressed through broad reductions in international trade. In fact, research tells us workers will bear the worst costs of the tariffs.

The tariffs’ most immediate burden for workers is that wage growth (PDF) in a weakening job market is unlikely to rise alongside the rising costs of everyday items, like groceries. This rise in prices may be more painful than the most recent round of inflation, when tight labor markets kept paychecks growing more quickly than prices for the average worker. Worse, while wage growth in recent years was strongest for workers earning lower wages, the costs of tariffs are expected to hit low-wage workers harder. Beyond worsening wage growth, the tariffs are more likely to negatively affect workers:

• Overall economic activity may slow, raising unemployment. Tariffs are expected to raise overall unemployment, which will exacerbate an already deteriorating job market. The Yale Budget Lab estimates the tariffs will increase unemployment by 0.7 percentage points above what would otherwise be expected in 2026.
• Existing firms may lay off workers. Tariffs will hit businesses that import intermediate goods—for example, a manufacturer that imports parts or raw materials—with higher costs. Exporting businesses may also face pressure as global trading partners impose retaliatory tariffs. As employers become less profitable, layoffs and closures will likely follow. Affected workers who lose their jobs may face lasting financial hardships, which could devastate many workers, as the administration has shrunk other public supports for workers and their families.
• Policy uncertainty may hinder investment and hiring. The highly unusual, complicated, and opaque process for calculating, announcing, and implementing the tariffs makes their future far from clear. This has contributed to increasing uncertainty in the country’s economic policy to the highest levels in nearly a century. This uncertainty tends to depress economic activity and employment. Instead of reshoring production, firms might wait to move forward with such a significant investment until clearer economic times. And if the administration continues to undermine trust in the public data businesses use to navigate economic changes, employers across the entire economy may reduce their investments.

However, advocates of the tariffs argue that in the long-run, firms will reshore manufacturing and related jobs, making them worthwhile. The evidence doesn’t support this position. Even as markets and firms hopefully adjust to overcome the near-term job losses and perhaps lead to new hiring, the tariffs will likely reshape labor markets in ways that ultimately hurt workers. Any new jobs that do materialize are likely to be worse—and might worsen other jobs:

• Sustained economic effects will leave workers poorer. While the economy should return to full employment eventually, an economy made smaller by high tariffs and reduced trade would lead to lower wages and incomes than a more open economy. The potential effects of tariffs on capital flows could further depress investment and lower growth and wages.
• Lower productivity will limit wage growth.Tariffs tend to lower labor productivity in the overall economy, which hurts workers in general because the value of workers’ output is what drives their ability to command higher wages. Higher productivity is the economic foundation of wage growth, so if productivity lags, so will wage growth.
• Workers may lose power, leading to worse jobs. Tariffs might also affect the relative power of firms in product and labor markets. Evidence suggests freer international trade has made domestic markets more competitive, while recent tariffs led firms to gain market power (PDF). As firms gain more power, prices tend to rise, and wages may push downward.

How to mitigate tariffs’ harm to workers

To mitigate the many potential harms of high, broad-based, and uncertain tariffs on workers, policymakers need effective, not reactive, solutions. The economic uncertainty and negative effects unleashed by these tariffs go much deeper than trade, so federal and state policymakers should consider labor market strategies that support workers across the entire economy:

• Rethink the current approaches to trade policy. In the short term, workers would most benefit from reducing the tariff rates and the massive uncertainty surrounding them. In the longer term, Congress can assert their power to levy tariffs and rethink trade policy to better balance the gains from broadly free trade with more-targeted, strategic tariffs and other forms of restrictions that serve clear economic or policy objectives.
• Better support workers through economic shocks. Policies like Trade Adjustment Assistance and related programs intended to offset the economic shock of free trade but often fell short. In this new era of international trade, policymakers can prioritize affected workers by recommitting to and improving these policies. But they should also recognize the broader disruptive forces that threaten economic security in labor markets—including trade as well as technological advances, declining worker power, and changes in the nature of work. Policymakers should develop broader policy reforms that update labor protections, provide adequate social insurance, and address power imbalances between workers and firms.

The backlash to freer trade has led to more support for antidemocratic sentiment, opening the door to reduced governmental checks and balances and doubt around election results. More broadly, failed promises of broadly shared prosperity that undermine public trust in democratic institutions and processes need to be further understood. The tariffs risk accelerating these harms. Instead, policymakers should turn to evidence-backed labor and economic policies that protect and empower workers—and shore up our democracy by demonstrating that it can deliver a strong, inclusive economy.