TARRIFS & NATIONAL SECURITYThe National Security Costs of Trump’s Tariffs
Looking at the national security ledger, the costs of President Donald Trump’s tariffs are starting to become clearer than the benefits, especially for the U.S. defense industry, critical infrastructure, and relations with partners and allies.
President Donald Trump has been wielding tariffs to confront a range of national security threats: fentanyl, illegal immigration, the trade deficit, steel, aluminum and other imports deemed threatening. But looking at the national security ledger, the costs of those tariffs are starting to become clearer than the benefits, especially for the U.S. defense industry, critical infrastructure, and relations with partners and allies.
National defense requirements are perhaps the most direct link between economics and national security. Indeed, some first estimates of national income were developed in Europe to compare the ability of countries to raise and support armies. That basic idea remains the same: the United States needs people, materials, and production capacity to field military forces.
Tariffs, however, make it more expensive to meet national defense requirements. The full cost will depend on several factors, including whether and to what extent U.S. trading partners retaliate. But defense companies of all sizes are beginning to report higher costs, from the defense conglomerate RTX to a ball bearing manufacturer in New Hampshire. Higher costs could be justified if the United States were lacking access or capacity in important areas. Evidence of deficiencies, however, appears to be thin in several Section 232 cases with others still pending.
Tariffs on steel and aluminum are particularly confounding. In 2018, the Department of Defense concluded that domestic production was meeting the U.S. military’s needs, which accounted for approximately 3 percent of domestic production. Since then, steel production has declined slightly, but not dramatically, and aluminum production has remained relatively constant. The threat is not clear, especially because Canada is the United States’ leading source of imported steel and aluminum.
Tariffs make it more difficult to meet U.S. defense requirements in many of the same ways that they impact American households. Higher costs are passed to the customer, which in this case is the U.S. government. As a result, the Department of Defense simply cannot buy as much with its budget. Moreover, additional costs from tariffs are coming at a time when major weapon systems are becoming more difficult to deliver on cost and on time. As tariffs push costs higher, each dollar of public money will deliver less defense.
