{"id":179943,"date":"2025-04-10T07:05:49","date_gmt":"2025-04-10T07:05:49","guid":{"rendered":"https:\/\/peraltafinancing.com\/alabama\/what-are-trumps-tariffs-and-how-will-they-impact-your-wallet\/"},"modified":"2025-04-10T07:05:49","modified_gmt":"2025-04-10T07:05:49","slug":"what-are-trumps-tariffs-and-how-will-they-impact-your-wallet","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=179943","title":{"rendered":"What are Trump&#8217;s tariffs and how will they impact your wallet?"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<p>Last week, after months of uncertainty, President Donald Trump began rolling out his sweeping tariff plan to disrupt the global trade market. The Trump tariffs include an indiscriminate 10 percent tax on all international goods and additional targeted, higher tariffs on specific nations \u2014 like China \u2014 which will go into effect this week.<\/p>\n<p>The U.S. financial marketed has already seen a dramatic downturn in the immediate wake of Trump\u2019s tariff announcement, with the S&amp;P 500 declining more than\u00a0<a class=\"css-yywogo\" title=\"\" href=\"https:\/\/www.nytimes.com\/2025\/04\/06\/business\/stock-market-plunge-investment-bank-impact.html\">more than 10 percent in two days<\/a> last week and experiencing significant instability <a class=\"css-yywogo\" title=\"\" href=\"https:\/\/www.nytimes.com\/2025\/04\/06\/business\/stocks-trump-tariffs.html\">on Monday<\/a>. International markets have also plummeted as numerous countries prepare for what appears to be an inevitable global trade war.<\/p>\n<p>On Tuesday, APR spoke with John Dove, a professor of economics at Troy University, to better understand what exactly these tariffs are and what impact they will have on the American economy.<\/p>\n<p>\u201cSo, a tariff is a tax and it\u2019s a tax on all imported goods. So anytime that you and I purchase something from abroad, there is an additional tax placed on that,\u201d Dove explained. \u201cAnytime that a business, whether it be a small business or big business, imports any sort of input you know a machine or any sort of input that it uses to produce a final product, it also faces a tax. And again, obviously that has major ramifications given the international supply chain that the U.S. relies on and U.S. businesses and consumers rely on on a daily basis.\u201d<\/p>\n<p>Dove explained that one of the potential benefits of a tariff is the additional revenue it accrues for the federal government. However, while the federal government may benefit financially from Trump\u2019s broad, indiscriminate tariffs, Dove emphasized that both American businesses and consumers will ultimately suffer.<\/p>\n<p>\u201cOne reason why you might want to enact a tariff is obviously, as I said, it\u2019s a tax on imports and with taxes that\u2019s how we actually raise government revenue. So this is a way to generate additional government revenue,\u201d Dove stated. \u201cThe Trump administration estimates that these tariffs will raise about $600 billion a year. [But] again, it\u2019s important to recognize that while that number seems large it equates to roughly one month of federal spending.\u201d<\/p>\n<p>\u201cThe downside to these tariffs is that they become very economically distortionary, right? Especially in a highly globalized world that we live in. Businesses \u2014 both large and small businesses \u2014 heavily rely on the global supply chains that exist and have been built up over the past decades in order to produce low cost consumer goods and also to remain globally competitive,\u201d he continued. \u201cAnd so when we use tariffs in any capacity what that does is it actually makes it more expensive for businesses to produce goods and services, and, ultimately, those costs, those increased business costs, have to be passed on in some capacity and are typically passed on to consumers. So businesses\u2019 costs go up, they become less competitive, and consumers ultimately pay higher consumer prices at the end.\u201d<\/p>\n<div class=\"code-block code-block-6\" style=\"margin: 8px auto; text-align: center; display: block; clear: both;\">\n<div class=\"zox-post-ad-wrap\"><span class=\"zox-ad-label\">Advertisement. Scroll to continue reading.<\/span><\/div>\n<\/div>\n<p>Dove further explained that increasing the cost of imported goods could also lead domestic producers to raise their prices, again harming the consumer.<\/p>\n<p>\u201cA good way to think about it is, suppose that \u2014 I\u2019m here in the city of Troy \u2014 and let\u2019s suppose that McDonald\u2019s and Burger King are here competing with each other in the city of Troy. And for whatever reason, the city of Troy decides to impose a tax just on Burger King. Maybe they make the tax so high that it actually drives Burger King out of business, and so now we only have McDonald\u2019s, who is a monopolist, and one of the negative aspects of monopolists is that they are able to raise prices on consumers,\u201d Dove stated. \u201cSo, take that to the global environment that we see where we make it more difficult for global businesses to compete with domestic businesses. It does create the incentive and opportunity for domestic businesses to raise their price on consumers because there\u2019s less competition in the marketplace.\u201d<\/p>\n<p>In rolling out his tariff plan, President Trump has claimed that the targeted, higher tariffs being levied on other countries are \u201creciprocal\u201d \u2014 that they are equivalent to the tariffs already being levied by these countries on U.S. exports. Ostensibly, Trump\u2019s wish is that raising American tariffs on these countries will ultimately lead to deescalation, with both sides eventually lowering their tariff rates and increasing trade. Dove said that he \u201chopes\u201d such a scenario comes to pass, but he also stressed that the formula behind Trump\u2019s \u201creciprocal\u201d tariffs is itself inherently flawed.<\/p>\n<p>\u201cIt is important to note though that when you do actually look at the reciprocal tariffs that were imposed on other countries, it was based on the estimated tariff rate that those countries were placing on the U.S. Unfortunately, the math behind that and the way that those tariff rates was determined, it was actually based on a ratio of trade flows, which actually has nothing to do with the actual tariff rates or non-tariff barriers that other countries actually impose on the U.S.,\u201d Dove noted.<\/p>\n<p>Other economists, banks and financial institutions have made the same point, <a href=\"https:\/\/www.dw.com\/en\/why-trumps-reciprocal-tariffs-are-not-actually-reciprocal\/a-72177305\">criticizing Trump\u2019s so-called \u201creciprocal\u201d tariff formula<\/a> as nonsensical and poorly named, as it is actually based off of trade deficits, not tariff rates.<\/p>\n<p>\u201cThe actual tariff rates, average tariff rates, that other countries impose on us are significantly lower than than what the administration has actually indicated,\u201d Dove stated.<\/p>\n<p>Dove went on to argue that the Trump administration\u2019s on-again-off-again approach to tariffs and international economic policy could result in lasting financial instability in the U.S. economy, even if the tariffs are eventually repealed.<\/p>\n<div class=\"code-block code-block-6\" style=\"margin: 8px auto; text-align: center; display: block; clear: both;\">\n<div class=\"zox-post-ad-wrap\"><span class=\"zox-ad-label\">Advertisement. Scroll to continue reading.<\/span><\/div>\n<\/div>\n<p>\u201cNo matter what happens with tariff policy, given that we\u2019ve seen that it can really just change on a dime at any minute, the uncertainty that this creates can maybe be much longer lasting. And when you increase macroeconomic and just general economic uncertainty, well, it makes it harder for businesses and consumers to plan,\u201d he said. \u201cAnd when businesses and consumers are unable to plan long term, that means that they\u2019re willing to invest less in the U.S. economy, and when there\u2019s less investment in the U.S. economy, that tends to to decrease wages, that tends to decrease employment, and it tends to decrease economic growth. So, the the longer run implications of this could be something along those lines.\u201d<\/p>\n<p>As a final note, Dove emphasized the regressive nature of tariffs and the financial burden that low-income Americans in particular will face as a result of Trump\u2019s policy.<\/p>\n<p>\u201cTariffs, fundamentally, are a tax on imports, but they\u2019re also a regressive tax,\u201d Dove said. \u201cMost estimates indicate that these tariffs will end up costing the average household anywhere between $2,000 and $4,000 in increased consumer prices and that\u2019s something that obviously impacts a relatively low-income household much more disproportionately than a relatively high-income household.\u201d<\/p>\n<p><!-- CONTENT END 1 -->\n\t\t\t<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Last week, after months of uncertainty, President Donald Trump began rolling out his sweeping tariff plan to disrupt the global trade market. The Trump tariffs include an indiscriminate 10 percent tax on all international goods and additional targeted, higher tariffs on specific nations \u2014 like China \u2014 which will go into effect this week. The [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":179944,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11763],"tags":[71232,10916,71233,4197,65318,22088,16168,9792,16171,71234,11678,237],"dealstore":[],"offerexpiration":[],"class_list":["post-179943","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-alabama","tag-economic-policy","tag-economy","tag-global-economy","tag-impact","tag-international-trade","tag-president-donald-trump","tag-tariffs","tag-trade","tag-trade-war","tag-troy-university","tag-trumps","tag-wallet"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What are Trump&#039;s tariffs and how will they impact your wallet? - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=179943\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What are Trump&#039;s tariffs and how will they impact your wallet? - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Last week, after months of uncertainty, President Donald Trump began rolling out his sweeping tariff plan to disrupt the global trade market. 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