Introduction
In a conversation aired February 27, 2026, the economist Richard Wolff told Glenn Diesen that American tariff policy had been a comprehensive failure, that the U.S. Supreme Court’s invalidation of the IEEPA-based tariffs was a sign of political fracture, and that the American consumer had been stuck paying almost all of the tariff bill while getting almost nothing in return. Many of Wolff’s instincts track with mainstream economics. Some of his specific numbers hold up remarkably well. Others need tightening, correction, or context.
This article does two things. First, it takes Wolff’s checkable claims and measures them against the best available data. Second, and more importantly, it provides a balanced, evidence-based evaluation of the Trump tariff programs, examining what they achieved, what they failed to achieve, and what they cost. To make the consequences tangible, it uses Denmark as a running case study throughout, a small, open, export-driven economy that found itself caught in the crosshairs of both ordinary trade policy and the extraordinary Greenland dispute.
Two distinct tariff regimes are in play and must be treated separately. The first, from Trump’s initial term, includes the Section 232 tariffs on steel and aluminum (March 2018) and the Section 301 tariffs on Chinese goods (mid-2018 onward). These survived legal challenge and remained in force through the Biden years. The second, from Trump’s second term, includes the sweeping “reciprocal” and “trafficking” tariffs imposed under the International Emergency Economic Powers Act (IEEPA) in 2025, along with threatened levies on Denmark and seven other European nations linked to Greenland. The Supreme Court struck down the IEEPA tariffs in February 2026. Mixing the two without saying so produces confusion. This article keeps them apart.
Fact-Checking Wolff: Claim by Claim
“The Supreme Court ruled the tariffs illegal because tariffs are a tax, and taxing power belongs to Congress.”
Wolff’s legal characterization is materially correct for the IEEPA tariffs. The Federal Circuit, ruling en banc in V.O.S. Selections, Inc. v. Trump in August 2025, held that IEEPA’s authority to “regulate… importation” does not extend to imposing tariffs, and it emphasized that tariffs are a form of tax historically reserved for Congress under Article I. The Supreme Court affirmed that reasoning in February 2026, describing the tariff power as “very clearly… a branch of the taxing power” belonging to Congress. The ruling applied specifically to IEEPA-based tariffs, not to the earlier Section 232 or Section 301 tariffs, which rest on separate statutory authority and were not challenged in this case.
“Only about 5% of the tariff gets offset by foreign exporters cutting prices; Americans pay 95%.”
Wolff attributes this figure to the Kiel Institute for the World Economy. The actual Kiel Institute study, published in January 2026, used shipment-level data covering more than 25 million transactions valued at nearly four trillion dollars. Its finding: foreign exporters absorbed only about 4% of the tariff burden. The remaining 96% was passed through to U.S. buyers. Event studies on discrete tariff shocks imposed on Brazil (50%) and India (25% rising to 50%) in August 2025 confirmed the result. Export prices did not decline. Trade volumes collapsed instead.
Wolff said, “5% offset, 95% paid by Americans.” The Kiel study says 4% absorbed, 96% passed through. He was off by one percentage point, which is trivially close. This claim holds up.
Separately, the U.S. International Trade Commission’s retrospective study of the 2018-2019 tariffs found the same pattern in an earlier period: “U.S. importers bore nearly the full cost of these tariffs because import prices increased at the same rate as the tariffs”. Peer-reviewed work by Amiti, Redding, and Weinstein also finds near-complete pass-through. The finding is not contested in the mainstream economics literature. The Federal Reserve Bank of New York has reported that nearly 90% of tariff costs were borne by American firms and consumers.
“The tariffs generated under $200 billion in revenue, far short of what was supposed to happen.”
The Kiel Institute study provides the most direct check: U.S. customs revenue surged by approximately $200 billion in 2025 compared to the prior year. Wolff’s “under $200 billion” is roughly right for the annual increment. On a fiscal-year basis, customs duties rose from about $41 billion in FY 2018 to $71 billion in FY 2019, then continued to climb through FY 2022 ($108 billion). The Yale Budget Lab estimates all 2025-2026 tariffs (including the Greenland levies) would raise about $2.8 trillion over a decade on a conventional basis, with dynamic effects reducing that to $2.4 trillion.
Wolff is on defensible ground that annual tariff revenue, while large in absolute terms, fell short of some of the administration’s more ambitious claims about revenue generation and deficit reduction. The Tax Foundation estimated that tariffs added about $1,000 per household in costs in 2025 and as much as $1,300 in 2026.
“Manufacturing jobs shrank by 70,000 in the first year of the tariffs.”
Revised Bureau of Labor Statistics data show that the manufacturing sector lost an estimated 103,000 jobs between January 2025 and January 2026. The Cato Institute, analyzing BLS monthly data, found manufacturing employment fell in eight of the last nine months of 2025, shedding roughly 70,000 workers by December 2025 relative to a year earlier. Democrats on the Joint Economic Committee placed the loss at 108,000 for Trump’s second-term first year.
Wolff’s “70,000” figure matches the Cato tally through December 2025. The fuller picture, with revised BLS data, is worse: the decline was closer to 103,000-108,000 over the full January-to-January window. For the 2018-2019 tariffs, a Federal Reserve study found that manufacturing industries more exposed to tariffs experienced net employment declines, as input-cost and retaliation effects outweighed protection benefits. CEPR’s synthesis of Flaaen and Pierce’s work reports that moving a four-digit manufacturing industry from the 25th to the 75th percentile of tariff exposure was associated with a 0.4% employment gain from import protection, but a 2.0% loss from higher input costs and a 1.1% loss from retaliation, yielding a net decline of 2.7%.
“Tariffs, like sanctions, are easily evaded.”
Wolff is directionally right but overstates the certainty. The evidence clearly shows massive trade re-routing: U.S. imports from China fell, but imports from third countries rose as supply chains adjusted. The USITC found that Section 301 tariffs reduced imports from China by 13% on average, while sourcing shifted to other nations. This reflects legal avoidance (switching suppliers) rather than necessarily illegal evasion. Wolff’s sweeping claim that sanctions “don’t work” as a “settled matter” goes further than the available evidence supports and should be understood as interpretive commentary rather than an established empirical consensus.
Denmark: A Case Study in Collateral Damage
Denmark serves as a useful lens for examining the broader tariff story. It is a small, wealthy, highly open economy. The United States is its largest single export market, accounting for 18% of total Danish exports in 2024, up from 11% in 2015. In 2024, Denmark exported DKK 366.4 billion to the United States (roughly $52 billion), of which goods accounted for 68%. Goods imports into the U.S. from Denmark totaled $10 billion in 2024, led by chemicals and pharmaceuticals ($3.56 billion), computer and electronic products ($1.68 billion), and non-electrical machinery ($1.51 billion).
What Denmark exports and why it matters
Denmark’s export profile is dominated by pharmaceuticals (especially Novo Nordisk’s insulin, Ozempic, and Wegovy), wind energy technology (Vestas), industrial machinery, and shipping services (Maersk). One remarkable feature of the Danish economy is that roughly 75% of its goods exports to the United States never physically cross the Danish border. Danish companies rely heavily on a “merchanting and processing” model, in which the intellectual property is Danish but the manufacturing and distribution happen abroad, often in the United States itself. Novo Nordisk, for instance, operates fill-and-finish facilities in North Carolina. The International Monetary Fund noted in 2025 that “exports originating from Denmark that undergo customs represent merely 3% of total exports, which limits the direct effects of U.S. tariffs on the Danish economy”.
This structural feature creates a paradox. On paper, Denmark is heavily dependent on the American market. In practice, many of its largest exports are partially insulated from tariffs because the goods are produced inside U.S. borders or never enter the United States as physical imports subject to customs duties.
The tariff bite that did land
Despite that structural buffer, the tariffs that did apply hit hard. In the first 10 months of 2025, Danish exports to the United States incurred tariffs totaling DKK 3.3 billion, more than 9 times higher than in the same period in the prior year. This jump was driven primarily by the 15% base tariff on EU imports under the U.S.-Europe trade framework. Tariffs of 10-54% were applied to Danish pharmaceuticals, medical technologies, heavy machinery, and organic chemicals, sectors that collectively make up nearly 90% of Denmark’s goods exports to the United States.
Denmark’s economy ministry cut its 2025 growth forecast from 3% to 1.4%, citing both weaker pharmaceutical-sector performance (intensified competition in the weight-loss drug market from Eli Lilly) and U.S. tariffs on Danish exports. The central bank governor acknowledged that the combined effect of Novo Nordisk’s difficulties and Trump’s 15% levies required a substantial downward revision of the growth outlook.
The Greenland escalation
The tariff story took a geopolitical turn in January 2026. Trump announced a 10% tariff on imports from eight European countries, including Denmark, tied to European opposition to his plan to acquire Greenland. The rate was set to rise to 25% by June if no deal was reached. Markets reacted swiftly: the Morningstar Denmark Index fell 2.6% in a single session. Allianz Global Investors warned that “by tying tariffs to the Greenland dispute, the US may have transformed a diplomatic disagreement into a material economic threat”.
Trump withdrew the specific tariff threat on Greenland on January 21, citing a “framework of a future deal”. But the damage to investor confidence had already been done, and broader tariffs on the EU remained in place. The EU postponed a vote on ratifying its July 2025 trade deal with the United States, in part because of the Greenland-linked threats. The Confederation of Danish Industry warned of continued uncertainty and the risk of targeted tariffs on specific product groups.
What the Denmark case reveals
Denmark illustrates several dynamics that recur across the global tariff story:
- Tariffs imposed for non-trade objectives (Greenland, drug trafficking, immigration) generated political damage and market volatility out of proportion to their direct economic weight.
- Structural features of modern trade (merchanting, foreign-based production, intellectual property flows) blunt the effectiveness of tariffs as a coercive tool against sophisticated economies.
- Even when direct tariff exposure is limited, uncertainty acts as a separate and powerful drag on business planning and investment.
- Retaliation risk is amplified when the target is an EU member, because the EU responds collectively with tools such as the Anti-Coercion Instrument and an existing EUR 93 billion retaliatory tariff package.
The Peterson Institute for International Economics noted in early 2025 that “the harm to the United States from higher American tariffs [on Denmark] might be greater than the harm to Denmark,” given that key Danish exports (pharmaceuticals, nuclear reactor parts, specialized medical devices) have few ready substitutes.
Economic Evaluation: Successes, Failures, and Trade-offs
What the tariffs achieved
The evidence supports three areas of partial success, all of which are qualified by significant caveats.
Reduced imports from China. Section 301 tariffs reduced U.S. imports from China by about 13% on average from 2018 to 2021. China’s share of U.S. imports fell from 21.6% in 2017 to 13.7% by 2023. This was a stated goal, and it was achieved. The U.S. government’s own assessment argues that the tariffs “created leverage” and discouraged some export-oriented foreign direct investment into China.
Modest production gains in targeted sectors. The USITC found that Section 232 tariffs boosted U.S. steel production by about $1.3 billion and aluminum production by about $0.9 billion above what would have occurred otherwise by 2021. Section 301 tariffs increased U.S. production in the ten most heavily tariffed industries by between 1.2% and 7.5%. Semiconductors saw some of the largest effects: imports fell by 72.3%, U.S. prices rose by 4.1%, and domestic production increased by 6.4%.
Significant customs revenue. Customs revenue surged by approximately $200 billion in 2025 alone. Over a decade, the Yale Budget Lab projects net dynamic revenue of roughly $2.4 trillion from the full 2025-2026 tariff regime. In the long run, manufacturing output is modeled to expand by about 3.2%.
What the tariffs failed to achieve
Manufacturing employment did not recover. The tariffs were sold as a way to bring factory jobs home. Instead, manufacturing employment shrank by roughly 103,000 jobs in 2025. This extended a pattern already visible in 2024, when the sector shed 105,000 workers. The scholarly literature on the 2018-2019 tariffs explains why: the positive employment effects of import protection were more than offset by higher input costs for downstream manufacturers and the loss of export markets to retaliatory tariffs.
The trade deficit did not shrink. For the full year 2025, the U.S. trade deficit in goods and services totaled slightly more than $900 billion, nearly unchanged from 2024. The tariffs failed to close the gap between imports and exports, which was a central claim of the policy’s rationale.
Consumer prices rose. Tariffs functioned as a regressive consumption tax. The Yale Budget Lab estimates a short-run consumer price increase of 1.3%, representing an average loss of $1,751 per household. Lower-income households, who spend a larger share of income on goods, bore a disproportionate burden: 2.6% of post-tax income for the lowest decile versus 0.8% for the highest. Apparel prices rose as much as 21% in the short run, and motor vehicle prices rose roughly 12%, equivalent to about $6,200 on the average new car.
Net welfare declined. Aggregate studies of the 2018-2019 tariffs estimate that the overall costs to consumers and downstream firms exceeded the gains to protected industries and government revenue, producing a small net welfare loss for the U.S. economy. The Yale Budget Lab projects that the full 2025-2026 tariff package will leave the U.S. economy persistently 0.3% smaller in the long run, equivalent to roughly $100 billion per year in foregone output. Manufacturing gains of 3.2% are crowded out by contractions in construction (4.3%), agriculture (1.3%), and mining (2.1%).
Policy uncertainty undermined the stated objective of reshoring. The on-again, off-again character of tariff policy, with rates raised, lowered, suspended, reimposed, and struck down by courts, created an environment in which no CEO could rationally commit capital to reshoring production. The Brookings Institution noted that the Supreme Court ruling “does not automatically unwind those costs or reverse the business decisions already made in response” to the tariffs, and that further legal challenges to replacement tariffs are inevitable, adding yet another layer of uncertainty.
Distributional consequences
The tariffs redistributed wealth in specific and measurable ways:
GroupEffectProtected upstream producers (steel, aluminum)Gained modestly in output and prices. Downstream manufacturers (automakers, appliance makers) faced higher input costs and saw output reduced by 0.6%. Consumers, especially lower-income households, bore nearly the entire tariff cost in the form of higher prices. U.S. exporters (agriculture and services) lost market access due to retaliatory tariffs. Foreign exporters (e.g., Danish firms) lost some U.S. market share; most did not cut prices. Federal government: Gained customs revenue, partially offset by slower growth.
Impact on targeted foreign economies
The effects on foreign economies were real but uneven. China’s share of U.S. imports dropped substantially, and one widely cited estimate places the economic impact at up to 0.5% of Chinese GDP over five years. However, this figure is attributed to a former Chinese official and should be treated as illustrative. China’s total global exports, meanwhile, reached record levels as firms redirected sales to other markets.
Denmark’s experience shows a different pattern: a high-value, specialized exporting economy partially shielded by its merchanting model and foreign production facilities, but hit by uncertainty, erosion of the U.S.-EU trade framework, and the political shock of tariffs weaponized for territorial acquisition. The Yale Budget Lab estimates that the EU and UK actually see tiny GDP gains (about 0.03% each) from trade diversion effects, while Canada and China bear the most concentrated losses.
Conclusion
The Trump tariff experiment produced measurable results in narrowly defined areas: imports from China fell, certain upstream industries saw modest production gains, and customs revenue rose substantially. On every broader measure of national economic performance, however, the policy record is negative. Manufacturing employment shrank. The trade deficit was unchanged. Consumer prices rose regressively. Net national welfare declined. And the erratic, politicized application of tariffs, including their use as leverage over Greenland, poisoned trade relationships and generated a legal backlash that ultimately gutted the administration’s preferred statutory mechanism.
Richard Wolff’s core economic claims hold up well against the data. Tariffs are taxes, and Americans pay nearly all of them. Manufacturing jobs did not come back. Revenue fell short of the most ambitious projections. His precise numbers were close to, and in one case slightly understated, those of the best available research. Where Wolff is weakest is in his sweeping assertions about the futility of sanctions and the ease of evasion, claims that reflect a defensible worldview but go beyond what the empirical record can confirm with certainty.
Denmark’s experience adds a cautionary footnote. Even a small, well-managed economy with sophisticated companies and structural buffers against tariffs was not spared the secondary effects: planning uncertainty, political coercion, investment hesitation, and the erosion of trust in the transatlantic trading system. If the goal of tariff policy is to strengthen the American economy and its alliances, the evidence from this period suggests a different set of tools is needed.
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