The Macroeconomic Effects of Tariffs: Evidence From U.S. Historical Data

We study the macroeconomic effects of tariff policy using U.S. historical data from 1840–2024. We construct a narrative series of plausibly exogenous tariff changes based on major legislative actions, multilateral negotiations, and temporary surcharges– and use it as an instrument to identify a structural tariff shock. Tariff increases are consistently contractionary: imports fall sharply, exports decline with a lag, and output and manufacturing activity drop persistently. The shock transmits through both supply and demand channels. Prices rise in the full sample but fall post-WWII, a pattern consistent with changes in the monetary policy response and with stronger international retaliation and reciprocity in the modern trade regime.

That is from a new paper by Tamar den Besten and Diego R. Känzig.  These effects of course do take some while to appear.