During the first few months of Trump’s presidency, he’s made it clear that everything he campaigned about, will be implemented one way or another and reactions from the public or foreign powers will not sway his decisions.
On April 2, Trump revealed his tariffs plan, dubbed “Liberation Day.” The imposition of duties ranging from 10 to 49 percent on imports from 60 trade partners, including India, China, and the European Union.
The taxes on U.S. importers of foreign products are a major unilateral escalation of Trump’s trade war. However, the White House has been describing them as “reciprocal” due to long-standing trade deficits run by the U.S. and higher tariffs in some countries.
“They do it to us, and we do it to them,” Trump said. “Very simple. Can’t get any simpler than that.”
Under Trump’s new tariff plan, China will face a 34 percent tariff, the European Union 20 percent, Taiwan 32 percent, and India 26 percent.
Tariffs are taxes on goods imported from other countries. Companies buying foreign products pay the tariffs imposed on them — and, as a result, face higher costs that are typically passed on to customers.
“It is going to affect everything in the economy,” said Josh Stillwagon, an associate professor of economics and chair of the Economics Division at Babson College. “There’s this immediate price increase that’s going to be passed on to consumers here, basically as soon as the retailers have to buy a new product.”
The Trump administration argues these tariffs will counteract “highly unbalanced” trade deficits, which have weakened U.S. manufacturing, supply chains, and national security.
The policy primarily targets countries with the U.S. having the highest trade deficits.
The disparity will happen, and the elimination of the middle class and poor is a very real possibility. “It’s not just the price aspect and purchasing power decreasing,” said Flores-Macías. “As tariffs work their way through the economy, low-income families’ jobs often will be the first to go. And those sectors of the population are most vulnerable.”
Economist Susan Helper, former senior adviser for industrial strategy at the White House Office of Management and Budget, said that there are some cases where tariffs could raise wages, but this doesn’t look likely to be one of them.
“There isn’t enough certainty for businesses to invest and create new and better jobs,” she said. “It takes a few years at minimum to profit off a new facility or factory, and I don’t think people have the confidence that the tariffs will be stable enough that they will have a return on that investment.”