Trump's new tariffs come with a catch for US citizens

Since his campaign ignited, Donald Trump has repeated, time and time again, his new favourite word: tariffs.

According to the President, tariffs, imposing a price hike on foreign goods that arrive at the border, will promote home-grown production, making America great... never mind. Before Trump began imposing 25 percent tariffs on good from Canada and Mexico, most things moved over the northern and southern borders for free due to, erm, President Donald Trump’s U.S.-Mexico-Canada trade agreement. He has since gone back for forth and back again on the plan.

On the face of it, increasing in the price of importing foreign goods would push people towards non-tariffed, US-built products, which would boost the domestic economy and put more money into the pockets of US citizens, right?

How will Donald Trump’s tariffs affect me?

First of all, companies cannot simply turn their back on foreign goods and look to home-grown manufacturers if they simply don’t exist in the United States. Over the years, globalisation, an ease of transport and cheaper foreign labour (due to a lack of restrictions on worker welfare) have led people to look elsewhere for their goods, whether that be choosing to deal with neighbouring countries such as Canada and Mexico, or more afar, like China.

And it has been a necessary development in the post-war economy. The United States does not make everything, so companies have their hands tied when it comes to looking at home or abroad. In turn, with the tariffs, they will be forced into paying higher prices to import from outside, with the tariff money going out of their pocket and into that of the U.S. Treasury.

If the American companies have to pay 25% more (for example) to import materials, that means their profits will be lower as their own costs have increased. In order to balance the books, the final customer price of the item must be higher: you and I end up paying the tariffs.

And there’s more. Since Trump’s 19th century idea has gone down like a ton of bricks across the world, countries - such as China, with whom the US has a huge market - have retailiated, raising their own tariffs in an attempt to making U.S. products pricier and harder to sell abroad.

While increasing the jobs market in the U.S. sounds like an obvious solution, things are not that straightforward. A study by economists at the Massachusetts Institute of Technology, the University of Zurich, Harvard and the World Bank concluded that Trump’s tariffs “neither raised nor lowered U.S. employment” and even went on to have “negative employment impacts”.

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Of course, if America were one huge factory that built ever piece, nut and bolt required for the production of everything we use in our daily lives, there would be no issue with tariffs as the United States would be self-sufficient. But that’s simply not the case. As a result, the normal people on the streets, just like with Trump and Musk’s seemingly wonderful (but not quite so) DOGE payments, are the ones who feel the negative force.

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