On April 2nd, the Trump Administration imposed a new 10% baseline tariff on almost all countries and increased tariffs on countries such as China and those in the EU. The stock market felt the effects of the tariff announcements almost immediately, with the Dow Jones Index tanking nearly 4,000 points in the following week. A tariff is a tax on imports, so any resource, material, or product will be faced with a tax. The George W Bush Foundation explains that while tariffs are taxes charged to a product’s country of origin, the price is often placed on the consumer.
Mr. Michael Flaim, an AP Economics teacher, says, “About 99 out of 100 economists think tariffs are a bad idea. They cause inflation, so they raise prices worldwide because it’s a political action that affects the economy. Tariffs are meant to protect domestic production, but they almost always lead to retaliatory tariffs, which caused significant inflation in the past.”
While there are many valid concerns regarding the economic implications of the tariffs, there is a possibility for positive environmental repercussions. Claire J. ’27 says there may be some possible benefits to high tariffs, although they aren’t economic: “People will be buying less stuff, so that could be good for the environment.”
Due to a reduction in the general population’s ability to purchase goods, overall consumption will decrease. A reduction in production, transportation and waste of products has a positive environmental impact. There will be less plastic being produced, fewer fossil fuels burned to ship goods overseas, and fewer goods thrown out after use. The high costs of new products will also encourage thrifting and more intentional buying decisions.
However, the economic impact of these tariffs will be devastating. On April 11, a 125% tariff was imposed on China. This means that a water bottle from China that may have previously cost $20 could cost $45 under the 125% tariff, or more if a full-fledged trade war breaks out. Trump has stated that the tariffs on China will not increase.
Flaim discusses the concerns of boycotts on U.S. goods internationally, saying, “people have just said they’re not gonna buy U.S. exports […] That’s, you know, that’s a very real possibility if people just kind of threw up their hands and said, okay, fine, then we’ll go without U.S. orange juice and U.S. whiskey; we’ll just not drink it, or we’ll go somewhere else for our steel production. Those kinds of responses would be more sort of grassroots, where people just didn’t buy U.S. products. Apparently, that’s happening widespread across Canada.”
A possible decrease in demand for U.S.-produced goods may further worsen the economy, as only U.S. citizens will be purchasing U.S. goods, which is not enough to fully support the U.S. economy, due to increased globalization leading to international interdependence.
The length and future severity of the tariffs are unknown. It is important to stay informed about tariff-related changes to the best of our ability, or else we may be blindsided by a higher-than-expected total at the grocery store checkout. Price increases have not been immediate, but, according to the New York Times, some companies plan on increasing their prices in the next few weeks.