Tariffs, Tariffs, Tariffs
For obvious reasons, I've discussed tariffs with clients and prospects a few times these past couple of months, and I'm sure you've heard the term in a few other places as well. There's a good reason for that since they can affect our wallets, jobs, and the economy in a big way.
Things to Know About Tariffs
1. Higher Prices
Tariffs act like a tax on imported goods, meaning companies pay more to bring things into the U.S. They pass those costs on to you, making everything from electronics to groceries more expensive.
2. They Won’t Fix the Trade Deficit
The current administration has said it doesn't like all the deficits the U.S. has and is using tariffs to reduce how much the U.S. buys from other countries compared to how much we sell. But in reality, higher tariffs won’t make much of a difference because other countries retaliate, and exports take a hit too.
3. They Won't Make Us a Manufacturing Economy Again
Data shows a fraction of people in the U.S. are employed by farms and factories compared with decades past. Experts say focusing on domestic goods production could cost consumers while undermining America’s growing advantage in the knowledge economy, since most are now in service jobs in fields like software, finance, and healthcare. And many manufacturing jobs from the 1970s peek have been eliminated by technology and automation.
4. Bad for the Economy
Overall, tariffs will cause less trade which means slower economic growth. Experts predict tariffs will shrink the U.S. economy over time. That could mean fewer raises, fewer job opportunities, and a weaker stock market.
5. Companies Are Nervous
Businesses don’t like unpredictability. When tariffs go up and down with every new policy, companies hesitate to invest in new projects, hire new employees, or expand. That affects job stability and wages.
What’s Next for Consumers?
If tariffs stay in place or increase, we could see a continued slowdown in growth, ongoing price hikes, and more financial strain on consumers and businesses.
Bottom Line
Tariffs cause inefficiencies and will cost us money and slow the economy.
As a believer in the invisible hand of capitalism, I hope the current administration will reverse course, or at least reduce tariffs, so businesses can have a steady, efficient policy in order to make good business decisions.
For now, we wait and see.
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