For decades, supporters of tariffs have argued that taxing imports is an effective way to strengthen domestic manufacturing, protect jobs and reduce dependence on foreign suppliers. Yet the recent U.S. experience raises an uncomfortable question: what happens when the cost of that protection ultimately falls on consumers and workers?

One year after the implementation of the so-called "reciprocal tariffs," the evidence is becoming difficult to ignore. Prices have risen across multiple consumer categories, goods-related inflation has accelerated once again, and wage growth is no longer keeping pace with the cost of living. In practical terms, Americans are paying more while their purchasing power continues to erode.

For the agricultural sector, which has long operated at the center of global trade disputes, these developments carry particular significance. Every disruption in international commerce affects supply chains, input costs, export opportunities and long-term market competitiveness.

A Policy That Created More Uncertainty Than Stability

One of the most criticized aspects of the tariff strategy has been the volatility of effective tariff rates. Frequent changes made it increasingly difficult for businesses to plan investments, manage inventories and forecast costs.

Source: Bloomberg. "This Is No Way to Run a Trade Policy."

The immediate consequence was a noticeable increase in prices across a broad range of consumer goods. Companies facing higher import costs chose to pass at least part of those expenses on to customers.

Inflation Returns to the Forefront

The argument that foreign exporters would absorb the burden of tariffs has lost credibility as economic data accumulated. Evidence suggests that a substantial portion of the cost has ultimately been transferred to American consumers.

Source: Bloomberg. "Taking Off - Again."

Inflationary pressure affects more than household budgets. It also raises operating expenses for sectors that depend on imported machinery, technology, equipment and industrial inputs.

Wages Are Falling Behind Prices

Perhaps the most important development is the deterioration of purchasing power. For several quarters, wage growth outpaced inflation. That relationship has now reversed.

Source: Bureau of Economic Analysis and Bloomberg. "Falling Behind."

When prices rise faster than incomes, consumers inevitably lose ground. For millions of households, this translates into reduced spending power and growing dissatisfaction with economic conditions.

Record Corporate Profits, Struggling Workers

While consumers and employees face mounting pressure, companies that successfully passed higher costs through to customers have reported historically strong profit margins.

Source: Bloomberg and data cited by The Wall Street Journal. "Earnings Power."

This divergence helps explain why financial markets continue to perform strongly while an increasing share of Americans believe the economy is not working in their favor.

A Lesson for Global Trade

The tariff debate is often framed as a simple choice between protecting domestic industries and embracing free trade. Reality is far more nuanced. The available data suggest that when trade policies lack predictability and international coordination, the costs are ultimately shared by consumers, workers and businesses alike.

For a highly integrated economy such as the United States-and for strategic sectors including agriculture, food production, agribusiness exports and commodity markets-competitiveness depends not only on protection, but also on stability and predictability.

Because if, after a year, prices are higher, wages are losing ground and uncertainty remains elevated, the question is no longer who pays for tariffs. The question is how long a strategy can endure when its primary victims appear to be the very people it was intended to help.