During his first term in office, Donald Trump made promises he couldn't keep. Nevertheless, he still won votes. A study from last October written by UBS Foundation Professor David Dorn and co-authors from Harvard University, MIT, and the World Bank looks into the economic implications.

This article by Manuela Siegert was originally published by Schweizer Radio und Fernsehen (SRF) on 30.1.2026. Translated and edited for context purposes by the UBS Center.

In the whirlwind of political measures that Trump has been announcing for a year now, his first term in office from 2017 to 2021 has faded into the background. Even back then, he had plunged into a tariff conflict, partly with the EU, but mainly with China.

It began in February 2018 with tariffs on washing machines and solar panels. In the summer and fall of that year, the US introduced a 10 percent tariff on a wide range of Chinese imports. Trump's promise: jobs would be brought back to areas that had experienced deindustrialization and job losses.

It was unable to deliver on this promise. This is shown by a study from last October written by researchers from the University of Zurich, Harvard University, MIT, and the World Bank. Import tariffs had no significant positive effects on employment or income — neither in the short term nor in the longer term.

Companies reacted unexpectedly

One reason for this is that American companies did not expand their production, explains co-author David Dorn. Instead, they raised their prices. The Professor of Globalization and Labor Markets at the University of Zurich says: “So the companies are profiting. They can sell the same amount of goods at higher prices. But this hardly creates any additional jobs.”

Consumers are the ones who suffer. “They pay higher prices for both imported goods and American goods. And they don't benefit from an increase in jobs.”

Countermeasures from China

Some industries even lost jobs. Take agriculture, for example: with USD 176 billion (as of 2024), the US is one of the largest exporters of agricultural products. According to figures from 2024, East Asia was the most important market after the US itself.

China responded with countermeasures at the time. According to the study, the average Chinese tariff on US goods rose from 8.0 to 21.8 percent in less than two years, while the average US tariff on Chinese goods rose from 3.1 to 21.0 percent.

The states around the Great Lakes in the north and certain southern states were most protected by tariffs. Even though the study failed to detect more jobs or higher worker incomes in these areas, Donald Trump gained supporters. This effect persisted or even intensified – until Donald Trump's re-election in 2024.

“Many people say they think it's right for the government to take action against Chinese competition,” David Dorn concluded from the surveys. “And Donald Trump is clearly credited with taking an interest in the concerns of industrial workers in the American heartland.” Voters rewarded the attention they received, regardless of whether they actually benefited from it.

In January 2020, the tariff war between the US and China temporarily ended with an agreement. Nevertheless, tariffs remained in place, even during the Biden administration. Currently, after a tariff spiral full of threats and export restrictions, additional tariffs of 10 percent have been in effect since November. Even though David Dorn considers it too early to make a concrete forecast, he says: “It is clear that the idea of bringing back industrial jobs on a large scale through new tariff barriers has little chance of success.”