I. Introduction:
The Charge Against Tariffs
For years, critics of protectionism have repeated a simple refrain: tariffs are a tax on consumers—and therefore a tax on the poor. This accusation is stated so often, and with such assurance, that it has hardened into a kind of economic dogma. It rests on an assumption so neat, so convenient, that few pause to question it: that companies merely pass 100 percent of any tariff cost directly into retail prices. According to this view, every tariff instantly becomes an invisible sales tax that falls on the most vulnerable households.
This argument is elegant, but it is also profoundly incomplete.
Real-world evidence from 2018 to 2024 tells a far more complex story. In industry after industry, tariff costs were absorbed not by low-income consumers, but by importers, retailers, and foreign manufacturers fighting to retain access to the American market. In some cases, domestic firms cut margins to stay competitive; in others, foreign exporters quietly lowered prices. The assumption of perfect, frictionless “cost pass-through” belongs more to an academic chalkboard than to the actual behavior of businesses operating under competitive pressure.
When understood properly, tariffs are not simply price instruments—they are tools of national development. They are levers that can protect workers, rebuild industrial ecosystems, and strengthen national security. They can shorten supply chains, revive local communities hollowed out by decades of deindustrialization, and restore the productive foundation on which any middle-class society depends.
Catholic social teaching has long warned against treating human labor as a mere cost variable. Economic policy must serve the dignity of the person, not reduce workers to passive recipients of whatever global markets dictate. A nation that neglects this moral truth risks losing not only its industries, but its soul.
The deeper truth is this: far from taxing the poor, well-designed tariffs prevent the long-term economic harms that have devastated working-class Americans for decades. They defend wages, preserve industrial dignity, and restore the conditions under which families and towns can flourish. The charge against tariffs is loud, but it is shallow. The case for them—when viewed through history, lived experience, and national interest—is far stronger than critics allow.
II. The False Assumption: “Companies Just Pass the Costs to Consumers”
The most common objection to tariffs rests on a deceptively simple premise: when the government imposes a tariff, companies merely raise prices to compensate, and consumers—especially the poor—bear the full burden. It is a neat claim, and its simplicity gives it rhetorical force. But it is rooted in an abstract theory of price-setting that bears little resemblance to how markets actually function.
In the real world, prices cannot rise indefinitely. Every firm faces competitive ceilings: if it pushes its prices too high, customers walk away, postpone purchases, choose substitutes, or shift to a competitor. Market pressure forces producers and retailers into complex calculations, and these calculations often prevent them from fully passing tariff costs onto consumers. In other words, tariffs do not exist in a vacuum; they operate within the constraints of competitive behavior.
As Rerum Novarum reminds us, economic life must reflect real human conditions, not abstract formulas. Markets do not operate outside the moral order; they operate within it.