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By Victoria Hansen, HansenV@Findlay.edu
On Feb. 1, the White House announced a 25% tariff on incoming goods from Mexico and Canada alongside a 10% tariff on goods coming in from China. According to Miriam-Webster dictionary, a tariff is “a schedule of duties imposed by a government on imported or in some countries exported goods.”
“A tariff is pretty much what I call a trade and economic tool,” said Dr. Epken Owie, assistant professor of supply chain management at the University of Findlay. “In America’s case, the tariffs are being used by the President, from his perspective, in a strategic way to address different things. Some of the issues include, of course, economic trade imbalances, but there have been some highlights about national security with illegal immigration and drugs coming in.”
The White House said the tariffs are enforced due to the “extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl” that they claim is coming in from Canada, China and Mexico. The tariffs against Mexico and Canada have been delayed after they promised to cut down on fentanyl smuggling and illegal immigration coming into the U.S.
According to economists, these tariffs could cause prices to increase, as Mexico supplies more than 60% of the U.S.’s vegetable imports and nearly half of fruit imports. Similarly, gas prices could go up as Canada supplies more than 70% of the U.S.’s crude oil import.
For UF students, these tariffs could mean higher prices for day-to-day purchases. As the costs of imported raw materials and parts rise, those price hikes are likely to be passed on to consumers potentially impacting students’ budgets.
“It could [effect] at the granular level, in terms of shopping at Walmart and buying your basic necessities,” Dr. Owie said. “Long term, the cost of the additional tariffs and duties could add up and could exacerbate the current inflation issues we have at the moment.’
Along with the increased tariffs against China, Trump also signed an executive order to end China’s use of the U.S.’s de minimis policy.
“That was a loophole that allowed for items under $800 to be brought into the United States without duties,” Dr. Owie said. “That helped a lot of small businesses. Companies like Temu and Shein took advantage of that and brought a lot of product into United States and paid no duty on them.”
The United States Postal Service briefly placed a ban on all incoming packages from China and Hong Kong, however was lifted the next day on Feb. 5. This came shortly after the closure of the de minimis loophole was announced.
Opponents of these executive orders say that these actions could help trigger a trade war. In response to the 10% tariffs that the U.S. placed on China, China has retaliated with a 15% tariff on some US goods and has announced that they will investigate Google.
“If they keep escalating back and forth, it could complicate the global economy and the supply chain,” said Dr. Owie.
