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President Donald Trump has promised throughout his presidency to revive American manufacturing by putting punishing tariffs on foreign competition.

But a new study from the US Federal Reserve suggests that his efforts have backfired — and that the manufacturing sector is worse off than it was before the president began his protectionist trade policy.

Economists Aaron Flaaen and Justin Pierce, who describe their study as “as the first comprehensive estimates of the effect of recent tariffs on the US manufacturing sector,” argue that the data shows that any benefits from protection from foreign competition have been more than canceled out by retaliatory tariffs from trading partners and an increase in the cost of components sourced from abroad.

As a result, US manufacturing has seen job losses and higher prices for consumers.

“We find the impact from the traditional import protection channel is completely offset in the short-run by reduced competitiveness from retaliation and higher costs in downstream industries,” the authors say.

The findings affirm predictions from trade economists across the political spectrum who have warned that Trump’s tariffs were more likely to damage the US economy than help it — particularly in a globalized economy, where any major departure from free trade norms comes with an array of costs.

The findings also directly contradict what Trump says the effects of the tariffs have been. Trump has argued that “the U.S. is taking in massive amounts of money” and has claimed “Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs.”

The study finds the tariffs he has imposed on things like steel, aluminum, and Chinese goods have not done this at all. Given Trump’s adversarial relationship with the Federal Reserve, it seems unlikely the president will be swayed by the work of its experts, meaning the study probably will not alter his calculus on trade policy.

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Originally posted by Steve Miller:
Numbered account in the Caymans.