On Wednesday, April 2, President Donald Trump announced a 10 percent minimum tariff levy on all US imports. The announcement of the tariffs, on a date the Trump Administration dubbed “Liberation Day”, marked a sharp deviation from prior administrations’ tolerance of the national trade deficit. While such fiscal decisions affect national economic trends as a whole, they also affect small-town communities.
Archie Williams senior Landon Sanchez has already noticed Liberation Day’s effects on his investment portfolio. According to Landon, stock prices took a nosedive shortly after the announcement of the Liberation Day tariffs.
“I saw [Liberation Day’s aftermath] described as a stock market drought, so basically [stocks were] falling for multiple days. It definitely, definitely affected me a lot,” Landon said.
According to President Trump, the tariffs are supposed to encourage domestic manufacturing of goods and discourage American dependence on foreign markets. Industries that Trump indicated he wants to further develop include AI technology and the production of military weaponry.
While tariffs are designed to make foreign entities pay a fee, the Council on Foreign Relations says domestic consumers and manufacturers are typically those who pay the tariffs’ fees, not foreign producers. In this regard, tariffs can be regressive, as those in lower-income families will be proportionately more affected by tariffs than those who are not.
“I don’t think any good will come from the tariffs…The price of it is way too high for the majority of Americans. People losing jobs, businesses closing down, the GDP falling drastically, all to accomplish a little bit of gain, it makes no sense. It’s like one step forward and fourteen steps backward,” said Archie Williams government, economics, and US history teacher Steve Bluestone.
Bluestone believes that the tariffs could have a huge impact on our economy.
“I think [Liberation Day] is going to lead to a massive economic slowdown. It could approach the level of problems [seen during] the Great Recession,” Bluestone said
In the Trump Administration’s Liberation Day tariff plan, Trump assigned a 34 percent reciprocal tariff on China, one of the highest tariff duties out of any nation in the plan. According to the Center for Strategic and International Studies, the White House assigned tariffs based on the U.S trade deficit with a particular country. Last year, the US ran a 270 billion dollar trade deficit with China, the highest of any foreign nation.
Since Liberation Day, Trump has equivocated, giving no clear answer as to whether or not he will pause tariffs or terminate them completely. On April 9, he said he would pause select tariffs from Liberation Day, and then later said he would enact 50 percent tariffs on all countries in the European Union (EU) on June 1. The Trump Administration has since suspended the latter tariff until July 9 to facilitate trade talks with EU countries.
“It seems [the US government is] using the tariff as a kind of scare tactic or negotiating tool…So it’s hard to say exactly what it’s going to come down to,” said Archie Williams AP Economics teacher Mike Kelemen.
Federal courts have begun to wade into the matter of Trump’s tariffs. On May 29, a federal judge struck down Trump’s sweeping tariffs, only for the ruling to be temporarily blocked by an appeals court. Additionally, California Governor Gavin Newsom has recently tried to challenge Trump’s tariffs from going into effect in California, but a court prevented him from doing so. This means California will likely be affected by all tariffs in the future.
Since Trump’s tariffs are constantly changing, the U.S. economy will remain unpredictable for the foreseeable future. While Trump Administration’s Liberation Day tariffs dictate international economic commerce, they will also continue to affect the Archie Williams community.
