Investors' panic is misguided—history proves President Trump's tariffs boost investment, jobs, and long-term American prosperity.
The recent turbulence in stock markets triggered by President Trump’s proposed tariff policies illustrates how markets often chase expectations rather than reality. Wall Street is currently gripped by anxiety about President Trump’s proposed tariffs. Investors fear a trade war would lead to higher prices, a disruption of global supply chains, and slower economic growth. However, these fears are not grounded in economic reality or the U.S.’s recent history with tariff policies. These short-term jitters overlook a crucial fact: tariffs are fundamentally designed to boost U.S. domestic investment and productivity.
President Trump’s tariff proposals represent a strategic shift toward strengthening domestic production. Critics of tariff policies consistently fail to acknowledge that the primary goal of tariffs is precisely to revitalize domestic industry and promote U.S. economic investments. By limiting foreign market share through tariffs, businesses are encouraged and incentivized to invest in American manufacturing capacity, infrastructure, and supply chains. Tariffs lay the groundwork for sustainable long-term economic growth. Far from being an economic cost, tariffs will drive long-term job creation, wage growth, supply chain stability, and the self-sufficiency of the U.S. economy.
We can clearly see the long-term impact of tariffs in the years following the 2018 Section 232 steel and aluminum tariffs and Section 301 China tariffs. After some initial turbulence in late 2018, the S&P 500 rose over 24% from July 2018 when the tariffs were first implemented to January 2020, right before the COVID crisis. Despite initial anxiety, markets did extremely well in the aftermath of the 2018 tariffs despite skepticism from Wall Street.
FIGURE 1:
The direct positive economic impact of tariffs was a critical part of this growth. For example, the 2018 Section 232 steel and aluminum tariffs delivered substantial benefits to the country. U.S. steel production rose by 6.2 million metric tons (7.6%) across 2018 and 2019. Similarly, the aluminum tariffs increased domestic production by 40%. These increases translated to a $2.25 billion revenue boost for the steel and aluminum industries in 2021 alone.
The Section 232 measures also led major U.S. steel producers to invest in more than 15 new steel furnaces and mills across the country. These new projects represent some $20 billion of investment and the creation of over 4,000 jobs.
Notable major investments include:
In 2019, Steel Dynamics announced a $1.9 billion, 2,600-acre facility, and 600 employee flat roll steel mill in Sinton, TX, which was completed in 2022. This facility is now open and producing steel.
Nucor announced a $1.7 billion investment in a steel plate mill in Brandenburg, Kentucky in 2019 and completed the project in 2023, with 440 jobs added.
In 2020, Commercial Metals Company announced plans to construct a new $300 million micro mill to produce rebar and merchant bar quality (MBQ) products and create 185 additional jobs. The facility was completed in 2023.
Job creation was also a clear benefit of the 2018 steel tariffs. Steel and iron mill employment jumped by 1,600 jobs in 2018 and another 3,200 in 2019. The steel product manufacturing sector saw a similar rise, adding 2,300 jobs in 2018 and 2019. Moreover, the economic benefits of increased domestic manufacturing extend beyond job creation alone. The tariff benefits also include technological innovation, increased productivity, and improved economic security.
This is the recent economic history that markets should be accounting for, but some investors appear to overlook this recent history. Instead, driven by misguided and outdated economic narratives on tariffs, markets are reacting to their own anxiety and creating an artificial dip when no economic damage has actually been done. This creates a negative feedback loop and causes investors to mistake volatility for economic reality. Many investors are blinded by decades of free-trade rhetoric on how tariffs impact prices and growth that is inconsistent with recent economic history.
Meanwhile, the Federal Reserve has recognized the recent economic reality that tariffs do not impact prices substantially. In a February 2025 study, the Boston Fed found that President Trump’s proposed 25% tariff on Canada and Mexico — along with a 10% tariff on China — would cause a one-time inflation effect of only 0.5% to 0.8%. The Federal Reserve’s low inflation projection, coupled with the history of substantial post-tariff investment in the U.S. show how misguided the current market jitters are.
Conclusion: Patience, Not Panic, is Required
Markets today are essentially caught in a cycle of self-created anxiety—reacting to fears created by their own assumptions rather than genuine economic damage. Once investors step outside this cycle and recognize the genuine long-term impact of tariffs, the market will stabilize, align itself with fundamental economic realities, and experience substantial growth, just as it did after 2018.
Tariffs aren’t the problem—they are the solution. President Trump’s tariffs will strengthen the domestic economy, improve competitiveness, and secure America’s economic future. Patience and perspective—not panic—are necessary as the market recalibrates its understanding of what truly drives sustainable growth.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
Wall Street’s Overblown Tariff Fears Not Based in Reality
Investors' panic is misguided—history proves President Trump's tariffs boost investment, jobs, and long-term American prosperity.
The recent turbulence in stock markets triggered by President Trump’s proposed tariff policies illustrates how markets often chase expectations rather than reality. Wall Street is currently gripped by anxiety about President Trump’s proposed tariffs. Investors fear a trade war would lead to higher prices, a disruption of global supply chains, and slower economic growth. However, these fears are not grounded in economic reality or the U.S.’s recent history with tariff policies. These short-term jitters overlook a crucial fact: tariffs are fundamentally designed to boost U.S. domestic investment and productivity.
President Trump’s tariff proposals represent a strategic shift toward strengthening domestic production. Critics of tariff policies consistently fail to acknowledge that the primary goal of tariffs is precisely to revitalize domestic industry and promote U.S. economic investments. By limiting foreign market share through tariffs, businesses are encouraged and incentivized to invest in American manufacturing capacity, infrastructure, and supply chains. Tariffs lay the groundwork for sustainable long-term economic growth. Far from being an economic cost, tariffs will drive long-term job creation, wage growth, supply chain stability, and the self-sufficiency of the U.S. economy.
Previous Trump Tariffs Yielded Significant Economic Gains
We can clearly see the long-term impact of tariffs in the years following the 2018 Section 232 steel and aluminum tariffs and Section 301 China tariffs. After some initial turbulence in late 2018, the S&P 500 rose over 24% from July 2018 when the tariffs were first implemented to January 2020, right before the COVID crisis. Despite initial anxiety, markets did extremely well in the aftermath of the 2018 tariffs despite skepticism from Wall Street.
FIGURE 1:
The direct positive economic impact of tariffs was a critical part of this growth. For example, the 2018 Section 232 steel and aluminum tariffs delivered substantial benefits to the country. U.S. steel production rose by 6.2 million metric tons (7.6%) across 2018 and 2019. Similarly, the aluminum tariffs increased domestic production by 40%. These increases translated to a $2.25 billion revenue boost for the steel and aluminum industries in 2021 alone.
The Section 232 measures also led major U.S. steel producers to invest in more than 15 new steel furnaces and mills across the country. These new projects represent some $20 billion of investment and the creation of over 4,000 jobs.
Notable major investments include:
Job creation was also a clear benefit of the 2018 steel tariffs. Steel and iron mill employment jumped by 1,600 jobs in 2018 and another 3,200 in 2019. The steel product manufacturing sector saw a similar rise, adding 2,300 jobs in 2018 and 2019. Moreover, the economic benefits of increased domestic manufacturing extend beyond job creation alone. The tariff benefits also include technological innovation, increased productivity, and improved economic security.
This is the recent economic history that markets should be accounting for, but some investors appear to overlook this recent history. Instead, driven by misguided and outdated economic narratives on tariffs, markets are reacting to their own anxiety and creating an artificial dip when no economic damage has actually been done. This creates a negative feedback loop and causes investors to mistake volatility for economic reality. Many investors are blinded by decades of free-trade rhetoric on how tariffs impact prices and growth that is inconsistent with recent economic history.
Meanwhile, the Federal Reserve has recognized the recent economic reality that tariffs do not impact prices substantially. In a February 2025 study, the Boston Fed found that President Trump’s proposed 25% tariff on Canada and Mexico — along with a 10% tariff on China — would cause a one-time inflation effect of only 0.5% to 0.8%. The Federal Reserve’s low inflation projection, coupled with the history of substantial post-tariff investment in the U.S. show how misguided the current market jitters are.
Conclusion: Patience, Not Panic, is Required
Markets today are essentially caught in a cycle of self-created anxiety—reacting to fears created by their own assumptions rather than genuine economic damage. Once investors step outside this cycle and recognize the genuine long-term impact of tariffs, the market will stabilize, align itself with fundamental economic realities, and experience substantial growth, just as it did after 2018.
Tariffs aren’t the problem—they are the solution. President Trump’s tariffs will strengthen the domestic economy, improve competitiveness, and secure America’s economic future. Patience and perspective—not panic—are necessary as the market recalibrates its understanding of what truly drives sustainable growth.
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
TRENDING
House Trade Committee: Partisan Attacks on Trump, “Reciprocal Trade” & Retaliation
CPA Releases Recommendations for Bilateral Trade Actions
CPA Strongly Supports Proposed USTR Actions Against Chinese Dominance in Maritime and Shipbuilding Sectors
E-Commerce Bill Seeks More Support to Require Country-of-Origin Labels on Online Goods
Drug Safety Concerns: Four Indian Pharma Companies Issue Recalls in Last Three Months
The latest CPA news and updates, delivered every Friday.
WATCH: WE ARE CPA
Get the latest in CPA news, industry analysis, opinion, and updates from Team CPA.
CHECK OUT THE NEWSROOM ➔