RSI scholars on Trump tariffs’ impact on energy, insurance, U.S. agriculture, consumer prices, and more
In response to breaking news and sweeping new tariffs by the Trump administration, the R Street Institute is highlighting how they will impact the energy sector, consumer prices, auto insurance rates, and more. To speak with any of these scholars, please contact pr@rstreet.org.
Low-Energy Fridays: When Tariffs Are Worth It–And When They Aren’t
by Philip Rossetti, Resident Senior Fellow for Energy and Environmental Policy
Key Point:
“It’s worth understanding when tariffs might be appropriate and when they might carry more cost than benefit. The solar panel import issue is challenging because it isn’t a clear-cut trade matter—instead, it interweaves national security objectives and human rights concerns with otherwise mundane trade business as usual. In these situations, policymakers should keep the big picture in mind and ensure they maintain a hierarchy of priorities. Tariffs are a warranted policy in this latest case, but only because they are intended to address non-trade issues within broader U.S. foreign policy goals”
Tariffs raise prices, spark conflict and impoverish everyone
by Steven Greenhut, Resident Senior Fellow and Western Region Director
Key Point:
“The markets understand the basic truth about tariffs, which are taxes consumers in our country pay for imported goods. They raise prices, reduce our access to foreign goods and spark reciprocal tariffs that then punish our country’s farmers and manufacturers. They lead to less growth and more unemployment. They increase bureaucracy by requiring officials to calculate duties and enforce them. They create hostilities and have led to actual war.”
Low-Energy Fridays: Trade Boosts America’s Energy Security, Tariffs Threaten It
by Michael Giberson, Senior Fellow for Energy and Environmental Policy
Key Point:
“The proposed 25 percent tariff on steel will raise costs for everything from gas pipelines to wind turbine towers to transmission lines to refinery equipment. Electrical transformers—already facing shortages, new regulatory requirements, and prices up more than 70 percent since 2020—will become even more expensive with steel tariffs, hampering updates and upgrades to the grid connecting power plants and consumers. Combining this impact with targeted tariffs on Canadian oil imports and Chinese solar components effectively throws sand in the gears of every major energy system we have—and that’s without considering the retaliatory tariffs our neighbors have suggested they’d employ on American exports to their nations.”
“Auto Insurance Rates Could Rise With Further Tariffs“
by Jerry Theodorou, Policy Director for Finance, Insurance, and Trade Policy
Statement on recent Trump tariffs:
“Tariffs are inflationary. Proposed tariffs will lead to higher premiums for buyers of automobile insurance and homeowners’ insurance. Most automobile parts are imported from our trading partners, led by Mexico and China. Tariffs on automobile parts mean higher auto repair cost, which means higher loss costs, which lead to higher premium for policyholders. Similarly, tariffs on imported lumber and other construction materials, coming chiefly from Canada, will inflate premiums for homeowners’ insurance.
Premiums for commercial property insurance will also rise as a direct result of the imposition of tariffs. In addition, some liability business lines are also expected to be adversely affected. For example, with shortages of high-quality imported goods needed for property repair and replacement, building trade workers may resort to taking short cuts with inferior domestic products. This will lead to more construction defect claims, with higher premiums. Workers’ compensation may also be impacted, as builders increasingly seek workarounds. The only line of business that may experience lower premiums is commercial auto.
As the U.S. isolates itself from its neighbors and imports dry up, trucks will be carrying fewer imports. The idling long-haul trucking industry will, however, take a hit.”
Bloomberg interview: Auto Insurance Costs Seen Rising Further With Trump Tariffs
“Tariffs Could Hurt U.S. Agriculture”
by Nan Swift, Resident Fellow for Governance Policy
Statement on new Trump tariffs:
“The new tariff regime isn’t the ‘big stick’ the Administration assumes it is wielding, particularly when negotiating among friends. History is clear on this point: tariffs will hurt those the Administration may intend to help. At the same time, these tariffs will cut a broad swath of destruction that will reverberate across our economy and families. Among the hardest hit will be some of the President’s strongest supporters. Though Secretary of Agriculture Brooke Rollins has promised aid, handouts are a poor substitute for markets.
During the prior trade war, USDA spent more than $2 billion to buy farmers’ silence. But that doesn’t go far when long-term trade relationships, supply chains, and trust are disrupted. Checks can’t restore broken trust. These kinds of handouts are also financially unsustainable and fiscally irresponsible. Taxpayers can’t–and shouldn’t have to–prop up an otherwise thriving agriculture economy willfully struck down by shortsighted tariffs.”
Research: Smoot-Hawley tariff of 1930 and its effect on U.S. agricultural exports