By Sade Reyes
TAMPA, Fla. — This week, the word “tariff” has become an increasingly popular and potent in the political vernacular. On Feb. 1, President Donald Trump imposed executive orders for tariffs on Canada, Mexico, and China only to suspend tariffs on two of the three nations just hours later.
With the quickly developing information and fast turnover in policies, The University of Tampa professors have shared their insights to provide a bit of clarity on the situation.
Earlier this month, professor of economics Abigail Hall Blanco spoke to FOX 13 Tampa Bay and gave her take on the potential impact of the imposed tariffs.
Her research includes “the impacts of foreign policy on domestic institutions.” She expanded upon her take and broke down her analysis.
“At the end of the day, it’s a tax. More specifically, a tax on foreign goods designed to make foreign goods look more expensive and domestic goods look relatively cheaper,” said Blanco.
Blanco said while the Trump administration’s goal may be to put a strain on Mexican, Canadian, and Chinese governments, the tariffs could also have significant effects for both U.S. business and citizens.
While two of the previous 25% tariffs have been suspended (Canada and Mexico), Blanco said that Chinese tariffs could still have an effect.
“Short-term [we] might not notice much of a difference. Let’s say six months to a year from now, when people go to buy Christmas or Hanukkah presents next year, stuff’s going to be more expensive. On an individual level, it tightens your budget,” she said.
As of now, the tariffs on Canada and Mexico are only on temporary suspension for one month. Blanco spoke about the impacts that these tariffs could have on a larger scale should they be implemented.
“Tariffs are harmful to the extent that U.S. businesses are tied to foreign businesses,” she said.
Blanco said in situations where American businesses have a foreign parent company or need to import goods from places that receive additional tariffs, business becomes more expensive.
As for the implications of numbers like 25% and 10%, Hemant Rustogi, chair of international business at UTampa, said the numbers are significant.
“Of course, 25% is much more significant than 10%, but it’s nothing to sneeze at,” Rustogi said.
“[Tariffs] increase the cost to the customers eventually, because the costs are borne by the companies. And then the costs are passed on to the consumers,” he said.
The University of Tampa economics department chair Robert Beekman shared a similar outlook.
Beekman said that in response to tariffs, United States domestic companies could face higher input costs. These costs could be taken on by the business, which would reduce profits. The cost could also be passed on to consumers, causing higher prices.
“In aggregate it will be inflationary and would be a net loss to our country. Some domestic producers may see an increase in sales and production as they will be somewhat shielded from some foreign competition, but many other domestic firms will see input costs rise and profits fall,” Beekman said.
The White House has claimed that these tariffs are a necessary response to “the extraordinary threat posed by illegal aliens and drugs, including deadly fentanyl.” However, the professors are skeptical of tariffs as a means of execution.
Blanco said she was not confident any of the imposed or suspended tariffs would stunt the flow of either illegal immigration or drugs into the country.
“What Mexico and Canada effectively offered in exchange for suspending the tariffs were things that they had already said they were going to do anyway, which was putting 10,000 more border guards or more, basically moving some resources to the border,” said Blanco. “But that doesn’t really change the realities of the current migration network. Doesn’t change how the vast majority of migrants come into the country. But in terms of the illicit drug market angle, specifically, I don’t see this policy being particularly effective at all.”
Last month professional economists urged the president to refrain from implementing tariffs by executive order in a letter published by The Wall Street Journal.
This concern is acknowledged by UTampa professors and economists alike.
“I think it’s a totally valid concern. I think there are other ways to negotiate what’s in the best interest of the American consumer, because tariffs don’t hurt the countries, they hurt us consumers,” said Rustogi.
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Photo by Sade Reyes.