In recent years, the United States has placed increasing emphasis on trade policies that prioritize national security, supply chain resilience and economic growth. In an era of global volatility and technological rivalry, these may be real and relevant policy objectives. However, it is equally, if not more, important to consider how such measures affect markets and, ultimately, the daily lives of US consumers.

Tariffs and import restrictions are two types of trade barriers that directly affect household well-being. First, such policies can reduce diversity in the domestic market by making it more difficult for consumers to access high-quality, lower-cost imports. A second effect concerns competition. When foreign firms face barriers to entry, domestic firms may encounter less competition, resulting in higher prices and reduced incentives to innovate over time. Together, these factors can make it more difficult for families to make ends meet, particularly for lower and middle-income households that are more sensitive to changes in the cost of goods.

The electric vehicle sector provides a useful example of how these dynamics play out. As part of its broader climate and industrial objectives, the US has set ambitious targets for deploying sustainable energy technologies, including EVs. At the same time, levies on imported EVs have increased significantly in recent years, in some cases by more than 100 percent. As a result, vehicles that are competitively priced at the point of production may end up costing significantly more by the time they reach US consumers, once taxes, tariffs and distribution costs are factored in.

In other major markets, including Europe and Canada, similar models — with a range of high-tech features such as advanced driver-assistance systems and integrated digital platforms — are often available at lower prices. Of course, cross-market comparisons are shaped by multiple factors, including government subsidies, regulatory frameworks and shipping costs. Nonetheless, the effect of current US trade policy is to make it more difficult for US consumers to access lower-cost alternatives at a time when affordability remains a pressing concern.

Survey data suggest that many US households are increasingly focused on value for money and would welcome a wider range of EV options. Expanding the variety of available vehicles could accelerate adoption, support environmental goals and ease financial pressures on households. However, current policies limit the availability of such options.

There is substantial empirical research on how tariffs affect consumers. Studies by the Federal Reserve Bank of New York indicate that US consumers and businesses, rather than foreign producers, have borne most of the costs of tariffs imposed since 2018. Similarly, the Kiel Institute for the World Economy found that tariffs function much like a consumption tax, with the burden falling largely on domestic consumers.

Industry projections provide further insight into how trade policies may affect consumers. According to the National Automobile Dealers Association, trade-related costs could raise vehicle prices by several thousand dollars. For many households, a car represents the second-largest expenditure after housing, meaning even modest price increases can significantly affect affordability and access.

As former White House economic adviser Gary Cohn has observed, tariffs can have regressive, tax-like effects, as lower-income households tend to spend a larger share of their income on goods.

At a macroeconomic level, tariffs can also contribute to higher prices. Several analyses suggest that recent trade restrictions have added upward pressure to the cost of various consumer goods, compared with historical trends. Tariffs are only one of several factors influencing inflation, including supply chain disruptions, energy prices and monetary policy, but they remain a policy tool with clear and measurable effects. Goldman Sachs, for example, has estimated that tariffs have had a modest but noticeable impact on inflation, with some effects likely to persist.

At the same time, tariffs have generated substantial government revenue, estimated to have exceeded $200 billion in 2025. This underscores the trade-offs involved in their use.

Trade barriers affect not only prices, but also the way firms compete. In more open markets, companies tend to improve efficiency, invest in innovation and adapt to evolving consumer preferences. When access to international competitors is constrained, these incentives may weaken. Over time, this can lead to higher prices, slower technological progress and fewer choices for consumers.

This raises important questions about how to balance short-term support for the domestic EV industry with long-term competitiveness. Policies that strengthen domestic production capacity can be valuable, particularly in emerging sectors. However, sustained success overseas often depends on the ability to compete on both quality and cost.

Trade policy discussions frequently emphasize the importance of safeguarding national interests, supporting job creation and strengthening industrial capacity. These are important objectives. It is equally important to consider the perspective of consumers, who bear much of the cost of these policies.

A well-designed trade strategy seeks to balance multiple objectives: safeguarding national security, supporting domestic industry and promoting consumer well-being. Achieving this balance is complex and requires ongoing adjustments as economic conditions evolve. Policies that preserve a degree of openness and competition -while advancing strategic priorities — are more likely to support innovation, efficiency and broad-based growth.

In this context, careful consideration of the long-term effects of trade policies can help inform better decisionmaking. By weighing impacts not only on industry, but also on prices, consumer choice and household purchasing power, policymakers can better align trade strategies with the broader goal of sustainable and inclusive economic development.

Ultimately, trade policy should be evaluated not only by how effectively it advances national objectives, but also by how it shapes everyday economic experiences of consumers. Ensuring that markets remain dynamic, competitive and responsive to consumer needs is an essential part of that broader goal.

The writer is the executive vice-chancellor, American president, and distinguished professor of social science at Duke Kunshan University in Kunshan, Jiangsu province.

The views do not necessarily reflect those of China Daily.