A major challenge facing President Donald Trump’s trade agenda is that the costs come first and any benefits, which are hotly debated by economists, will come later.
Voters, who are already tired of several years of inflation, may not want to endure the tariffs long enough for any shift in the balance of trade to occur, even if they may in theory like the idea of American reindustrialization or getting tough with China. Most polls on tariffs don’t show much patience or support from the public.
Congressional Republicans, who will need to face the voters next year, are perhaps more skittish about the tariffs. Their narrow House majority will be in play in the 2026 midterm elections, as will be a third of the Senate, where the map on paper still favors Republicans.
The business community, which has been an important Republican constituency even as the party undergoes a populist makeover under Trump, has been more still. The stock market has been up and down since the tariffs were announced, taking a hit whenever Trump seems dug in on them and recovering whenever he signals flexibility. But the uncertainty itself about the tariff rates, how long they will be in place, and who might actually have to pay them has contributed to the market volatility.
Surveys have shown growing economic pessimism among voters and investors, despite better-than-expected jobs and inflation reports early in Trump’s second term. Trump won last year because of widespread public dissatisfaction with the economy under former President Joe Biden.
This isn’t the first time a presidential policy has been imperiled by deferred benefits and up-front costs. When former President Barack Obama signed his sweeping healthcare reform into law, many of the mandates and costs came first, while the subsidies were phased in later.
Polls showed that voters wanted Obamacare repealed. Democrats lost 63 House seats in the election that followed its enactment. Republicans took control of the chamber for the remainder of Obama’s presidency and captured the Senate several years later in 2014.
Republican lawmakers sought to defund Obamacare, believing they had to act before the bulk of the subsidies kicked in.
“In modern times, there has never been any major entitlement that has gone into effect and has been unwound,” Sen. Ted Cruz (R-TX) warned at the time.
But while Republicans won the House shortly after Obamacare passed, it took four years for them to take the Senate and Obama was reelected as president in the election in between. That made it difficult for the GOP to enact major changes to the healthcare law.
By the time Republicans had unified control of the federal government again, in 2017 during Trump’s first term in the White House, public opinion had turned. Repeal had become disruptive of people’s existing healthcare arrangements and stalled in Congress, although the unpopular individual mandate was ultimately gutted.
The Medicare Catastrophic Coverage Act of 1988 wasn’t so lucky. It was a new entitlement that came with front-loaded costs, borne by the senior citizens who were supposed to be its primary constituents and beneficiaries. Those voters became angry when their existing health plans were disturbed.
A healthcare scholar quoted a reporter as saying at the time, “the elderly are not against the new benefits — unlimited hospital care, new at-home benefits, prescription drug coverage; they just don’t want to pay for them.” The law was repealed by a Democratic-controlled Congress in just a few months.
The tariffs are at least partially intended to encourage the restoring of jobs to the United States. The theory is that many foreign countries are more dependent on the U.S. market than the other way around, giving Trump and Washington leverage. But consumers and businesses closer to home may not want to pay for them.
Trump said last week that the eventual tariff on Chinese imports “won’t be anywhere near” as high as the current 145%.
“It’ll come down substantially,” Trump said. “But it won’t be zero.”
Many analysts interpreted these remarks as a sign that Trump was seeking an off-ramp from the coming trade war. But he declared at least partial victory, telling Time magazine, “I’ve made 200 deals.”
PRESSURE BUILDS ON TRUMP THE DEAL-MAKER TO DELIVER
“We’re a department store, a giant department store, the biggest department store in history,” Trump said. “Everybody wants to come in and take from us. They’re going to come in and they’re going to pay a price for taking our treasure, for taking our jobs, for doing all of these things.”
Trump predicted trillions of dollars in new investments will pour into the U.S. in response to the tariffs. If so, it may need to happen quickly.