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President Trump imposed tariffs of up to 25% today on imports from Mexico and Canada, two of the United States' biggest trading partners — while increasing tariffs on China. Apu Gomes/Getty Images North America hide caption
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Apu Gomes/Getty Images North America
It's not just American consumers who will feel the impact of tariffs — businesses across the country will, too.
President Trump imposed steep new taxes Tuesday on imports from three of the country's biggest trading partners — China, Mexico and Canada — raising concerns about rising prices, a falling stock market, and retaliation against U.S. exporters.
The taxes are expected to lead to higher prices on a wide range of imports, including Canadian lumber, fresh produce from Mexico and toys from China. Mark Zandi of Moody's Analytics told Morning Edition that the tariffs would cost the typical U.S. family $1,200 a year.
But the tariffs will be costly to American businesses, too. Most will try to pass the cost of the tax on to consumers but many will likely have to absorb some of the cost themselves.
And businesses have also been operating in a state of limbo, unsure of when or whether the import taxes would take hold.
"Customers are pausing on new orders as a result of uncertainty regarding tariffs," one factory manager told the Institute for Supply Management for its monthly survey on manufacturing conditions.
'What-if scenarios'
Randy Carr runs a business based in Ft. Lauderdale that makes embroidered emblems for sports teams and work uniforms. Much of the manufacturing is done in Mexico.
Carr said he'll try to pass the new import tax along to customers by raising prices, but assumes he'll have to bear some of the cost himself. As a result, he's temporarily halted investment at his factories in Texas and Georgia.
"We have a plan to deal with it, but honestly it's punitive to my staff and the growth of the business, because it's just another form of a tax," Carr said.
Randy Carr's company, World Emblem, does its most labor-intensive manufacturing in Aguascalientes, Mexico. Carr has paused investment while he tries to adjust to President Trump's new tariffs. Courtesy of Randy Carr/Randy Carr hide caption
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Courtesy of Randy Carr/Randy Carr
Dealing with the tariff has been a distraction, he added.
"We're not running the business," Carr said. "We're not taking care of our customers. I'm not taking care of my employees. I'm taking care of what-if scenarios on tariffs."
American farmers are concerned
Canada and China swiftly responded with tariffs of their own on U.S. exports. Mexico promised to do the same in the coming days.
Those tariffs could hurt American producers. China, for example, imposed retaliatory tariffs on products including corn, cotton, soybeans and pork.
That tit-for-tat alarms Bob Hemesath, who raises corn and hogs in Decorah, Iowa. He worries about the potential fallout for rural communities across the country.
"There's a lot of jobs associated with agriculture and agricultural trade," he said. "Once you lose those export markets, it's awful hard to get them back."
A trade war during Trump's first term in office hit agricultural exports so hard, the federal government ended up making farm relief payments of more than $60 billion — much of the money brought in by tariffs on imports from China.
Trump's new tariffs could also drive up the cost of potash fertilizer, much of which comes from Canada.
"Let's make this as short as possible and let's resolve it as quickly as possible," Hemesath said.
An aerial view from a drone shows a farmer planting soybeans near Dwight, Illinois on April 23, 2020. China retaliated against the latest Trump's tariffs by imposing its own taxes on U.S. imports, including on soybeans. Scott Olson/Getty Images/Getty Images North America hide caption
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Scott Olson/Getty Images/Getty Images North America
U.S. Chamber asks Trump to reverse tariffs
The U.S. Chamber of Commerce — which has welcomed much of Trump's pro-business agenda — urged the administration to backtrack quickly on the trade war.
"Tariffs will only raise prices and increase the economic pain being felt by everyday Americans across the country," Neil Bradly, the chamber's chief policy officer, said in a statement. "We urge reconsideration of this policy and a swift end to these tariffs."
Meanwhile, stocks tumbled Tuesday, with the Dow Jones Industrial Average falling nearly 600 points as of midday. That followed a 650 point drop on Monday, after Trump said there was "no room left" for a deal to avoid the tariffs.
The tariffs include a 25% tax on most imports from Mexico and Canada, along with a 10% tax on Canadian energy products. Trump also imposed an additional 10% tax on imports from China, saying all three countries had not done enough to stop the flow of illegal fentanyl.
