Due to President Donald Trump’s tariffs on the world, the economy is starting to crash. Just a little while ago, the stock market was doing good, sitting at all time highs and growing at a good pace. Now, recession fears are beginning to raise concern all around the world.
President Donald Trump decided to place these tariffs as a way to raise money for the U.S. Treasury, protect U.S. industries, draw factories to the United States and serve as a negotiating tactic with other countries. While he might think these tariffs are doing good for the economy, it’s actually doing the opposite. Tariffs are taxes charged on goods imported from other countries, which can negatively impact the economy by making prices for goods skyrocket.
The countries that Trump is setting the tariffs on have taken the trade levels up to the highest rates in a century, possibly resulting in freight being abandoned at ports.
Rick Muskat, the president of the family owned shoe retailer Deer Stags, said “Then the tariffs were raised by 10% two times, bringing my tariffs up to 26%. Then last week Trump put on an additional 34% and now the 50% levied today.”
Muskat estimates that the cost of freight orders will rise from $60,000 to between $600,000 and $1 million.
U.S importers are expected to abandon goods at ports, which would either go back to the manufacturer or be destroyed.
One of Trump’s tariffs included a baseline 10% tariff on all imported goods to the US. Some analysts are concerned that this crash is going to result in a second Great Depression.
Trump also added another change, saying countries like China would receive a 90 day pause in the implementation of tariffs, but the new tariffs on China would rise to 125%. More than half of the $2 billion in daily import tariffs charged by the U.S. are to be on Chinese goods. These tariffs could reach over $1 billion per day.
These tariffs have stoked trade wars, and have caused possible long term risks for the economy. The price of food will rise 2.8%, including 4% for fresh produce. These rises in price will heavily impact the economy.
Customers may also start to see the sizes of products become smaller, but more expensive. Certain versions of specific items will be eliminated because companies are trying to offset their cost increases from these tariffs.
Foods that cannot be grown locally will see the largest price increase. Customers are already upset with grocery prices, and with these new rises in pricing, it’s going to make the frustration a lot worse.
While Trump said he was going to lower prices of groceries, this is not the case. This is sparking outrage across the country because of the misinformation that Trump provided before taking office.
The prices of groceries have increased 23% since 2021, making the prices of things such as chocolate, coffee, and produce much higher.
With these prices rapidly rising, businesses are seeing less money come in as people are not buying their products anymore due to the price.
Food isn’t the only thing that has had weak sales, household staples such as detergent, and paper towels are starting to slow down.
Bigger grocery stores, such as Costco and Kings Soopers are starting to notice less customers, as people are starting to go to cheaper stores.
These tariffs are not just going to increase the prices of goods, but the price of cars and electronics are expected to skyrocket. Trump’s 25% auto tariffs are going to add thousands of dollars to the costs of new vehicles.
These new prices are going to decrease the sales for cars and trucks significantly. These new tariffs are going to be implemented on May 3rd.
Automakers have responded to these tariffs in multiple ways. Domestic manufacturers are announcing temporary deals for employee pricing. Other manufacturers have started to cease U.S. shipments. Hyundai Motor said it would not raise the prices of cars for at least two months to ease the concern of customers.
Trump’s tariffs could also increase the price of IPhones by 30 -40% which could change the cost to nearly $2300 for an iPhone.
All of the tariffs that Trump set on countries are set to impact the economy a lot over the next couple of months, concerning many people. The prices of goods and other services are expected to skyrocket in the next couple months, which will decrease the sales that companies receive.
