Time For Tariffs:  Students, staff and economists react to the tariffs put in place by President Donald Trump, which will impact consumers 

Consumers will feel the impacts of the new tariffs on Mexico, Canada and China, signed by President Donald Trump as of Feb 1. 

There’s now a 25% blanket tariff on Mexico and Canada, which has been delayed 30 days, and a 10% tariff on China. The delay allows businesses to prepare for increased costs. There’s an exception for Canadian energy, which will only be tariffed at 10%. 

Associate teaching professor for the University of Kansas business school Dr. Levi Russell explains that tariffs are often used as negotiation tools between countries. Ultimately, both countries benefit from trade. Adding a tariff to one country’s products can be used as a negotiation tactic by limiting their profit until they inflict change. 

“It’s a negotiation,” Dr. Russell said. “It’s international relations. It’s about trying to get people to work together, but it’s an adversarial thing.”

The tariffs are intended to dissolve the “extraordinary threat” of immigrants and drugs, specifically fentanyl, according to the Trump Administration. 

The administration claims that the situation is a national emergency under the International Emergency Economic Powers Act, which says that the President may exercise all powers granted to them in response to “any unusual and extraordinary threat.”

The Trump Administration has deemed illegal immigrants and the flow of fentanyl an emergency, allowing Trump to do anything in his power to put an end to the emergency. 

According to Dr. Russell, tariffs can be used in the form of demands when allied countries are sorting out their issues. This is applicable in the U.S.’ relationship with Mexico. The Trump Administration is enforcing tariffs as an ultimatum for Mexico — either they can lose profit and sales from American consumers, or they can work to halt illegal immigration and the flow of fentanyl. 

In that case, the tariff is less focused on monetary policy, and more on foreign relations. If the tariff works as intended, both countries will remove the tariffs and they will return to free trade, according to Dr. Russell.  

According to financial literacy teacher Kevin Wiesner, it’s important to note that those taxes aren’t paid by the countries the tariffs are placed on, but rather by the companies that are importing the goods. 

“For example, if Apple imports something from China and there’s a 10% tariff on China and the good they’re importing, Apple has to pay that,” Wiesner said. “It’s not China paying it. It’s Apple.”

Senior Nicholas Black believes tariffs are harmful to consumers short-term. 

“It can be a good negotiating tool, but at the end of the day it creates an immediate issue for consumers because it raises prices,” Black said. “So while it can work, it often takes time and doesn’t yield immediate results unless one country is in a more advantageous position.”

Tariffs are based on the economic theory of supply and demand. According to Wiesner, in theory, tariffs are meant to encourage production on American soil rather than importing products. Ideally, tariffs would encourage Americans to buy from American-based companies. However, not all tariffs pan out that way. 

Wiesner gives the example of coffee beans. Because only one state, Hawaii, produces coffee beans, there isn’t enough domestic production to sustain the demand of Americans so the U.S. imports them. A tariff would have a negative effect as there wouldn’t be enough supply to meet the demand, hindering rather than encouraging domestic growth. 

The administration claims the tariffs will “hold Mexico, Canada and China accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into” the U.S.

However, in Federal Reserve Chair Jerome Powell’s testimony before Congress, he defended his opinion that countries without tariffs experience more growth because businesses are able to import with minimal restrictions. In the same congressional meeting, Senator Jack Reed shared that many economists predict that the newly implemented tariffs will raise the average family’s costs by $1200 per year and lead to a 1.2% increase in inflation. 

For example, a small business may need to charge higher-than-normal prices in order to keep their business afloat. Because they’re paying taxes on importation due to tariffs, their prices have to rise to cover those costs. 

This, in turn, creates inflation.

Yet, Dr. Russell says low consumer prices aren’t the only aspect to consider. The potential long-term effects of internationally lowered tariffs are beneficial enough to outweigh the short-term consequence of increased prices.

Many other economists declined to comment on the issue, out of fear of being too political. Overall, it’s generally accepted throughout that these tariffs will raise consumer prices short-term regardless of the long-term impact.