As incoming President Donald Trump threatens a litany of tariffs on imported goods, investors and consumers are wondering what it might mean for them. Will anything actually change? Or will Trump’s tariff threats end up as meaningless bluster?
Turns out, there’s a handy little case study on tariffs from Trump’s first term in office. In 2017, appliance giant Whirlpool (WHR) asked for help curbing imports of washing machines by its Korean rivals LG and Samsung. In early 2018, Trump imposed tariffs ranging from 20% to 50% on most imported washing machines. Whirlpool’s chairman at the time called the move “a victory for American workers and consumers alike.”
President Donald Trump speaks to workers at a Whirlpool manufacturing facility on Aug. 6, 2020, in Clyde, Ohio. (Scott Olson/Getty Images) ·Scott Olson via Getty Images
Trump imposed many other tariffs, but they mostly affected industrial products and components that went into other finished goods, making it hard to isolate the effects of tariffs. Washing machines were one of the few consumer goods subject to new import duties. The tariffs were supposed to lapse in 2021, but shortly before leaving office, Trump extended them for another two years. They finally expired in January 2023.
So there’s a before, during, and after period that allows analysis of price changes for an appliance many Americans have in their homes. Spoiler alert: Tariffs were not a victory for consumers.
During the time the tariffs were in effect — February 2018 to February 2023 — the cost of laundry equipment rose by 34%, according to Bureau of Labor Statistics data. Overall inflation was just 21% during the same time frame. The price of appliances overall rose by 23%. So laundry equipment rose by at least 11% more than it probably would have otherwise without the tariffs.
A statistical note: The category “laundry equipment” includes both washers, which were subject to new import tariffs, and dryers, which were not. But the price of dryers rose by roughly the same amount as washers during the tariff period. That’s mainly because washers and dryers are often sold together as sets, with each unit priced the same. So higher prices for washers allowed manufacturers to raise dryer prices as well. During the first year the tariffs were in effect, the cost of washers and dryers both rose by about $90 per unit, or roughly 12%.
Imports did decline. Washing machine imports fell by about 33% the first year the tariffs were in effect and stayed below pre-tariff levels through 2022. During that time, Samsung began producing washing machines at a US factory in South Carolina, and LG opened a plant in Tennessee. Whirlpool also increased domestic production and hired more workers. All told, new domestic production may have accounted for between 1,700 and 2,000 new jobs.
When the washing machine tariffs expired in 2023, prices promptly fell. From February 2023 to February 2024, laundry equipment prices dropped by 11%, while overall inflation rose by 3% and appliances overall fell by 5.1%. Imports rose in 2023, surpassing pre-tariff levels.
The net effect today is that the price of laundry equipment has changed by almost exactly the same amount as for appliances overall. Each is up about 15%. But laundry machine prices were more volatile, rising by a lot and then falling by a lot, whereas the cost of most other appliances rose gradually.
Industry spokespeople claim the Trump tariffs had “no sustained effect” on washing machine prices. But that’s only true because prices dropped when the tariffs expired. Anybody who bought a washer or dryer between February 2018 and February 2023 paid considerably more than they would have, absent the tariffs.
Was this a good deal for the US economy? “The tariffs did help US businesses, add jobs, and generate some tariff revenue. Those are the pluses,” said Felix Tintelnot, a Duke University economist who co-authored a 2019 study on the effects of the washing machine tariffs. “The minuses are that the costs largely fell on consumers.”
The 2019 study found the net annual cost to consumers for each new job created by the tariffs was about $815,000. That’s extraordinarily high. The average cost per job for subsidies such as state or local tax breaks meant to lure businesses typically ranges from $50,000 to $100,000. In 2017, Wisconsin announced a huge set of incentives to lure electronics giant Foxconn to the state, with a cost as high as $290,000 per job created. But taxpayers pushed back and the deal shrank dramatically. Today, Foxconn has just limited operations in the state.
The employment boost at a couple of new factories generated by Trump’s washing machine tariffs certainly bolsters a few local economies. But 2,000 jobs is an almost immeasurably small number in an economy that employs 159 million people overall and 12.9 million manufacturing workers. A tariffs-for-jobs scheme is not scalable without massively higher costs that consumers would notice and rebel against.
Inflation was tame when Trump imposed his first set of tariffs in 2018 and 2019. Higher costs for a few select items didn’t stress most people’s budgets. It’s a different story now, with Americans feeling burned by the recent bout of inflation and prices for some things permanently higher. The most important lesson to draw from Trump’s washing machine tariffs may be that he was lucky to get away with them.
