Tariffs are taxes imposed on the import or export of goods, functioning as a form of trade control. They aim to protect local industries, generate revenue for the government, and facilitate trade agreements. However, the implementation of tariffs can have significant negative effects on consumers and businesses. 

Currently, the government has enacted several tariffs. For example, there is a 25% tariff on steel and aluminum imports from Canada and Mexico, a 10% tariff on imports from China, and an additional 25% tariff on imports from Canada and Mexico, they are also putting reciprocal tariffs. Reciprocal tariffs are used to counteract unfair trading practices. These are tariffs that one country imposes in response to trade barriers or tariffs set by another, aiming to create fairness in trade by matching tariff rates on goods imported from the other nation. 

“I think it good that tariffs exist but when they start to get higher more things get expensive,” said DBHS senior Le-Nia Ester.

These tariffs can lead to substantial price increases, which is particularly concerning for low-income families that spend a significant portion of their income on goods, subject to these taxes. Tariffs can destabilize markets, reduce consumer confidence, and create uncertainty; as a result, consumers may delay purchases in anticipation of future price changes. While tariffs may protect local industries from foreign competition, reduced competition can diminish local businesses’ motivation to improve customer experience through better service, product quality, or pricing. 

Furthermore, tariffs can adversely affect smaller businesses by creating cash flow challenges. Smaller firms often lack the working capital necessary to absorb unexpected costs, leading to severe cash flow problems as their expenses rise. To cope, they may increase the prices of their products, which can further decrease demand from price-sensitive customers and reduce sales revenue. Additionally, finding alternatives to avoid using tariffed goods can be difficult for small businesses, as they typically have limited resources to search for new suppliers or redesign their supply chains.