NORFOLK, Va. — Life would be a lot easier if we had a crystal ball, especially when it comes to tariffs and our money.
As President Donald Trump's tariff announcements ripple through the economy, experts anticipate that stores will soon raise prices, reflecting the tariffs’ effect on consumer goods.
David Bieri, associate professor of public policy at Virginia Tech, says that history may also be an indication of the administration’s decisions, as this is not the first time the United States has implemented tariffs.
“We have theory and history as sort of guidelines to tell us — we know that this is going to hurt. We know who it’s going to hurt,” says Bieri. “The extent to which this will actually help the middle class — we’ll have to sift through the data as it comes in.”
Bieri and I talked about the start of 10% tariffs on virtually all goods being shipped to the U.S. and more reciprocal tariffs coming Wednesday.
Bieri explained, "It’s mostly in one of the key words that the president kept using, and that’s reciprocal, right? You do it to us, we do it to you. And some more in some instances."
The reciprocal tariffs target countries that sell more goods to the U.S. than they buy. For example, Australian imports will face a 10% tariff, while China will face a 34% tariff.
Bieri says Americans will start to feel the impacts immediately on a host of products, including vehicles and parts — new and used — alcohol, electronics, and apparel. Though Bieri noted that nothing happens in a vacuum.
"If we’re simply focusing on, 'Oh no, my [Volkswagen] is going to get more expensive. Oh no, my Aperol is going to get more expensive. I’m screwed.' Well, then you’re missing the point. Because it is true that this is what’s happening, but it is also true that part of the inflation that we’ve been experiencing is because our fiscal position is so out of whack," he said.
President Trump hopes the tariffs will help cut debt and raise revenue. A similar system, Bieri says, also operated about 100 years ago. The Smoot-Hawley Tariff Act of 1930 raised tariffs on more than 20,000 imported goods during the Great Depression.
"Some economists argue [those tariffs] actually made the depression worse, you know, because they clobbered us," Bieri says.
Now in 2025, we’ll watch again to see to what extent tariffs will impact us. In the meantime, world leaders are weighing in on their actions.
China is vowing to “fight to the end” and is preparing countermeasures to protect its trade. This comes after President Trump threatened an additional 50% tariff on China if they don't eliminate their new 34% tariff on U.S. goods.
Furthermore, China already has a 20% tariff that started last month. The reciprocal 34% tariff starts on Wednesday. If the president goes through with his additional 50%, that could mean goods from China will face a staggering 104% import tariff.
