Trump recently made threats of a high tariffs on America’s biggest trading partners, raising concern among its citizens.
What is a tariff?
A tariff is essentially a tax on imported goods, or goods coming into America from other countries. Although countries that export the goods are taxed, domestic businesses and the American people may ultimately pay the price. This is because the prices of taxed goods must increase in order for importing countries to compensate for the money they lose in tariffs. Therefore, American businesses and consumers bear the burden of tariffs, unless they decide to begin production domestically.
Why should students care about tariffs?
If Mexico, China, and Canada respond with retaliatory tariffs, Americans may be devastated with high prices, unemployment, and failing businesses.
KSU sophomore Ashley Powell explained her thoughts about the upcoming impact of tariffs.
“This could impact consumers,” said Powell. “New tariffs will have a good chance of driving up prices.”
She’s right. China is one of America’s largest trade partners for electronics, so we can expect the prices of phones, satellites, laptops, and more to spike if Trump follows through. According to CNN, some other goods we should expect to see a price increase in are shoes, toys, jewelry, sporting equipment and select vehicles.
On February 10, Trump announced a new 25% tariff on steel and aluminum imports. CNN reported this will impact canned goods, electrical lines, construction projects, bridges, roads, beverage packing, and oil rigs.
In fact, the oil market has already taken a hit. According to former Deputy Director of the National Economic Council Jason Furman, it has already cost Americans an additional 80 cents to fill up their tanks. Canada is a large trade partner for American oil; therefore, a 15-cent increase on each gallon can be expected relatively soon.
KSU student Katie Brown expressed her concern over gas prices.
“I’m worried that once gas prices go up, it will take much more to get them down,” she said. “College students can’t afford a spike in the cost of gas.”
The US Postal Service is also being negatively affected by the threat of tariffs. The service became overwhelmed with packages and processing when Trump announced that the tariff was paused just moments before they went into action.
CNN reported that the mail service originally halted all packages from China to comply with his orders. Therefore, many Americans should expect delivery delays if they ordered from China recently due to the severe delay in processing.
According to S&P Global, if the trade war intensifies, unemployment will begin to rise in America. Businesses will be unable to pay their employees due to the high cost of resources, forcing them to let go of workers to make ends meet.
John Militao, a student at KSU, has experienced impacts of the tariffs firsthand. He is employed at two different businesses that are beginning to feel the negative effects of the new trade war. The management orders from US Food and Cisco. The two businesses must choose between cutting down on options or adjusting its prices to maintain profit margins, Militao explained.
“Management in both businesses believe that neither supply chain company will eat the cost of tariffs if they take place,” Militao said. “The prices will rise for us.”
The future of the impending trade war has the potential to leave lasting consequences.
Since Trump has explained the purpose for the tariffs on few occasions, citizens must wait to discover the plan he has for the American market.
