How Tariffs Disrupt Supply Chains—and Kill Local Jobs

Tariffs Supply Chains

Tariffs are often sold as protection for domestic industries. But behind the political soundbites lies a painful reality: tariffs disrupt supply chains, inflate prices, and cost local jobs.

As former mayor of a border city in Arizona, Director of the Arizona Department of Commerce, and Chief of Staff at U.S. Customs and Border Protection, I’ve witnessed how deeply trade policies shape both global commerce and local economies. Today, as CEO of Intermestic Partners—an international business advisory firm founded in 2011 that specializes in cross-border trade and development—I work directly with companies navigating these disruptions.

What Are Tariffs—And Why Are They Used?

A tariff is simply a tax on imported goods, designed to:

• Protect domestic industries

• Safeguard local jobs

• Combat unfair foreign trade practices

Tariffs can be applied as:

• Specific tariffs (fixed amount per unit)

• Ad valorem tariffs (percentage of product value)

• Hybrid models combining both

While the theory sounds straightforward, the reality is far more damaging.

How Tariffs Break Supply Chains

In today’s global economy, supply chains span multiple countries. When tariffs are imposed:

• Imported materials become more expensive

• Production costs rise

• Companies either raise prices or seek cheaper offshore production

A 2018 National Bureau of Economic Research study found that U.S. tariffs directly contributed to manufacturing job losses, not gains.

Industries from auto manufacturing to electronics have seen costs surge due to tariffs on key inputs like steel, aluminum, and semiconductors—forcing some companies to move production overseas entirely.

The Local Job Loss Consequences

Higher costs often lead to:

• Reduced output

• Automation replacing workers

• Job cuts and offshoring

The very communities tariffs claim to protect are often hit hardest, facing unemployment, lower wages, and long-term economic decline.

Long-Term Damage: Stifled Growth & Innovation

Tariffs don’t just harm supply chains—they slow business growth:

• Firms avoid new investments due to higher costs.

• Innovation suffers as industries focus on survival, not advancement.

• Communities experience persistent job shortages and economic stagnation.

As the Economic Policy Institute describes, tariff benefits are often short-lived, while losses are gradual, compounding, and deeply harmful.

Smarter Alternatives to Tariffs

Rather than blunt-force tariffs, governments have better tools to support domestic industries:

🎯 Diplomacy Over Punishment

• Negotiate fair-trade deals

• Resolve disputes through international organizations

💡 Invest in Competitiveness

• Workforce training and education

• Research & development incentives

• Infrastructure upgrades

💰 Targeted Subsidies (Used Carefully)

• Direct aid to struggling sectors

• Encourage innovation and competitiveness without harming supply chains

The Bottom Line

Tariffs may sound tough—but their real-world impact often backfires. Supply chain disruptions, rising consumer costs, lost jobs, and weakened competitiveness are the real consequences.

At Intermestic Partners, we help top national and international companies navigate these challenges by building resilient supply chains and smarter cross-border strategies.

Let’s Build Smarter Trade Policies

The solution isn’t isolation—it’s strategic collaboration that protects workers, strengthens industries, and fosters sustainable growth.

Partner with Intermestic Partners to develop forward-looking trade strategies that work—for business, for workers, and for the economy.