During the first Trump Administration from 2017–2021, the United States increased the use of import duties (i.e., tariffs) against a range of products. These tariffs were largely left in place during the Biden Administration. During the 2024 U.S. presidential campaign, President-elect Trump repeatedly promised to dramatically increase the use of tariffs as a means of promoting American manufacturing and/or impacting the U.S. trade deficit. 

Now, President Trump is using several mechanisms to impose these tariffs, including: Section 301 of the Trade Act of 1974, which counters unfair trade practices; Section 201 of the Trade Act of 1974, which safeguards domestic manufacturers from import surges; Section 232 of the Trade Expansion Act of 1962, which counters national security threats; and the continued use of anti-dumping and countervailing duties.

The Trump administration’s 2025 decision to impose new tariffs on imports from Canada, Mexico, and China has raised significant concerns across various industrial sectors. While the economic implications are widely debated, an often-overlooked aspect is how these tariffs could impact product quality and safety standards, and personal and workers’ compensation injury and illness claims. 

There is still uncertainty around what the Trump administration will do, the level of tariffs, policy timing, and the net impact to industrial markets, but a drastic rise in tariffs (to levels not seen since the Great Depression) would almost certainly have a gigantic ripple effect across multiple layers of the economy, including inflation, consumption, investment, interest rates, exchange rates, and overall domestic output. Here is what we know based on historical perspective on tariffs.

Figure 1 – Historical Tariffs on Imported Goods to the United States

Source: The Tax Foundation, November 2024.

While the impacts could be both positive and negative depending on the industry and its position within the economy, the net risk could be mostly negative because of trade retaliation, business uncertainty, and consequential inflation.

How Tariffs Impact Health and Safety

Though it remains to be seen how tariffs will be deployed from February 2025 onwards, President Trump has expressed interest in applying increased tariffs on imports coming into the U.S.

• Up to 10% on all goods from China
• 25% on all goods from Mexico and Canada
• 10–20% on all goods from any location, and
• Up to 100% on all goods from the BRICS nations

Any such application of tariffs could significantly increase the price of goods entering the U.S., and consequently impact businesses importing goods into the U.S. and global supply chains more broadly. Further, it is likely that countries becoming subject to increased tariffs for goods entering the U.S. will apply retaliatory tariffs on U.S. goods as well.

As tariffs drive up the cost of imported goods, manufacturers, retailers, and suppliers may look for ways to cut costs—sometimes at the expense of product quality and consumer safety. This could lead to an increase in defective, contaminated, and dangerous products entering the U.S. market, ultimately resulting in a rise in product liability and workers’ compensation cases.

Tariffs are essentially taxes imposed on imported goods, making them more expensive for U.S. businesses and consumers. In 2025, the Trump administration introduced a series of tariffs on key imports, targeting countries like Canada, Mexico, and China. These tariffs affect a wide range of products, including:

• Automobiles and auto parts
• Electronics and household appliances
• Medical devices
• Children’s toys and baby products
• Construction materials and tools

By increasing costs for these imported goods, tariffs can disrupt supply chains and encourage manufacturers to cut corners, potentially compromising worker and product health and safety. The scope and magnitude of such tariffs remain unclear. Importers therefore face considerable uncertainty in the coming months. This makes forecasting costs around maintaining import-driven supplies for project development, manufacturing, retail, and other sectors difficult.

Increase in Low-Quality Substitutes

To avoid tariffs, some businesses may begin to purchase cheaper materials or shift production to low-income countries with weaker health and safety regulations. This can result in poorly made products that fail to meet U.S. health and safety regulations, leading to dangerous product defects and illness from product contamination. For example:

• Electronics made with substandard components may pose fire hazards,
• Children’s toys made with inferior plastic could contain toxic chemicals,
• Medical devices from lower-cost manufacturers might not undergo rigorous quality testing, increasing the risk of malfunction, and
• Purity of metals used in lead-acid battery manufacturing may contain appreciable amounts of inorganic arsenic as a contaminant

Even without tariffs, there have been  a number of cases where product liability and occupational health and safety challenges were associated with Chinese products:

• In 2015, 4.5 million hoverboards entered the U.S. before drafting product safety standards. Many hoverboards caught fire resulting in millions of dollars of property damage,.
• In 2019, Taishan Gypsum, a Chinese firm sold tainted drywall in the U.S. The product was alleged to have given off sulfur vapors that corroded metal in appliances, air conditioning equipment, wiring and plumbing fixtures. In some cases the sulfur vapors were blamed for illnesses.,
• In 2007, 255,000 steel-belted radial replacement tires for pickups, vans and sport-utility vehicles were recalled due to a safety defect that prevents tread separation,
• In 2006 and 2007, weak Chinese safety rules allowed melamine-laced pet food exports,
• Chinese toys containing high levels of lead-based paint in 2007, and
• In 2015, formaldehyde vapors were emitted into the air from Chinese wood flooring.

Other product recalls include:

• In May 2019 cosmetic companies undertook voluntary recalls of their respective cosmetic products that tested positive for asbestos fibers,
• On October 18, 2019, a consumer products company voluntarily recalled one lot of baby powder, after a talc sample tested positive for asbestos fibers.
• Some clothes and toy manufacturers ship fentanyl and counterfeit drugs with their product to dodge safety requirements.

Delayed Safety Compliance and Product Recalls

With tariffs driving up costs, some companies might delay product safety testing or neglect quality control altogether. When product safety is not a priority, the likelihood of fires and injuries increase. Additionally, when dangerous products are discovered, businesses that are already struggling with higher costs may hesitate to issue recalls—exposing consumers and those working with those products to further risk. 

Rise in Counterfeit and Black Market Goods

When tariffs make certain products too expensive, the demand for cheaper alternatives grows. This can lead to a surge in counterfeit goods that do not adhere to U.S. product safety regulations. For instance:

• Counterfeit airbags and automobile brake components could fail in emergencies, leading to devastating car accidents.
• Fake pharmaceuticals could lack active ingredients, rendering them ineffective or harmful.
• Knockoff electronic products might lack proper wiring insulation, increasing the risk of fire or electrocution.

Victims injured by counterfeit products may struggle to seek compensation, as these products often come from untraceable sources.

Who is Liable in a Product Liability Case?

If someone suffers an injury or illness due to a defective product, multiple parties could be held accountable, including:

• Manufacturers – If the product was inherently defective due to poor design, faulty materials or manufacture.
• Distributors and Suppliers – If the company knowingly sold defective products without warning consumers.
• Retailers – If they failed to remove recalled or dangerous products from their shelves.

Tariffs Impact Workers' Compensation

While tariffs primarily target trade and economic policy, increased tariffs can also impact workers' compensation in several ways. A financial analysis shows how rising tariffs may affect workers' compensation costs, claims, and benefits.

Job Losses and Reduced Workforce

Higher tariffs can result in less demand for imported goods, therefore upsetting the supply chains. Businesses may cut their employment or stop hiring in order to offset income losses. Production may be offshored to other countries. A decreased workforce could result in more responsibility for surviving workers, therefore increasing their chances of occupational injuries and illness from long working hours. Job losses could lead to fewer workers being insured under workers' compensation schemes, therefore lowering total claims but leaving more workers unprotected.

Expanded Workers' Compensation Premiums

Payroll size, job injury hazards, and general industry conditions all affect workers' compensation insurance prices. Should rising tariffs cause economic unrest, insurance companies could view a greater risk of claims resulting from financial burdens on companies. Rising rates, as a result, could make it more costly for businesses to offer workers' compensation coverage.

More Occupational Injuries and Illness Result from Cost-Cutting Strategies

Some firms may reduce their workplace health and safety programs, workforce training, or equipment maintenance in order to control tariff-related cost increases. A higher incidence of workplace injuries or illness could follow from these cost-effective actions. An increase in claims could impose financial strain on the workers' compensation system, therefore affecting either more or less claim approvals or lower benefit payouts.

Legal and Policy Changes Affecting Workers' Compensation

Should rising tariffs cause general economic downturns, legislators should consider some thought to changing workers' compensation schemes. Change in benefit arrangements, tougher eligibility standards, or new employer requirements meant to strike a balance between worker safeguards and economic concerns.

Which Industries Most are Impacted by Tariffs?

Manufacturing is one industry most heavily impacted by tariffs, particularly those relying on imported components. Industries such as automotive, heavy machinery, and consumer electronics are deeply integrated into global supply chains, making them vulnerable to tariff increases on imported goods. For example, tariffs on Chinese imports have led to increased costs for companies reliant on electronic components, steel and aluminum.

The agricultural sector may be hit particularly hard by tariffs, especially from those imposed on US exports like soybeans, dairy, and pork. China, one of the largest markets for US agricultural products, retaliated against US tariffs by imposing its own duties on these goods, significantly reducing demand. Farmers might find themselves caught in the middle of these trade disputes, experiencing reduced revenue and uncertainty in global markets.

The steel and aluminum industries are at the center of US protective tariff policies. The intent is to boost domestic production by imposing tariffs on foreign steel and aluminum imports. While US steel producers may benefit from these policies; downstream industries, such as construction, automotive, and manufacturing, faced increased costs for raw materials.

Conclusion

Rising corporate costs, job losses, higher premiums, liability, risk, and health and safety issues all indirectly affect workers' compensation and products made from increased tariffs. Tariffs  can disrupt supply chains and encourage manufacturers to cut corners, potentially compromising product safety and exposing workers to injuries and illness. Policymakers and companies must carefully balance keeping sufficient worker rights during these economic difficulties. To lessen the negative consequences of tariffs on workers' compensation and product liability, companies should investigate other approaches, including additional checks on imported products for quality and safety, investments in worker health and safety, and increasing vigilance.

References

1. Will Increased Tariffs Impact Workers' Compensation?, Dick Law Firm, February 05, 2025.
2. Walsh, M., Ognibene, N., Rivlin, K., Rezendes, M., U.S. tariff risks and risk mitigation, A&O Sherman, Dec 9, 2024.
3. Matt Snyder and Bart Carfagno, Chinese Product Safety: A Persistent Challenge to U.S. Regulators and Importers, U.S.-China Economic and Security Review Commission, Mar 234, 2017
4. Navigating Tariff Risks in U.S. Industrial and Logistics, Clarion Partners – Research, Dec 17, 2024.
5. The Impact of US Tariffs: Which Industries Are Most and Least Affected, IBIS World – Applying Industry Research, Oct 31, 2024.