HIGHLAND HEIGHTS, Ky. — President Donald Trump's tariffs on goods imported from Canada, Mexico and China took effect Tuesday, with immediate retaliation from the impacted countries.
As leading economists monitor the situation, the current consensus among experts is clear: consumers will likely face higher prices for imported goods. Dr. Darrin Wilson, a professor at Northern Kentucky University, broke down the nuances of tariffs with WCPO 9 News.
“A tariff is a tax or duty on goods that are brought into a country from another country,” said Wilson.
Wilson elaborated on the historical role of tariffs, indicating they have typically been used to protect vital industries within the United States, such as the steel industry.
Trump imposed a 25% tariff on goods imported from Mexico and Canada, alongside a 10% tariff on Chinese imports, which is slated to increase to 20%. The intention behind these tariffs is often presented as a means to discourage American consumers from purchasing higher-taxed imported goods, thus encouraging them to buy American-made products instead.
WATCH: We speak with an expert on how tariffs will impact America
While this strategy aims to bolster domestic production and jobs, it also raises concerns about possible repercussions for American consumers and businesses.
“What they’ll have to do is build their car plants frankly and other things in the United States, in which case they have no tariffs,” said Trump.
Yet Wilson warns that the ramifications of these tariffs may not be as straightforward as they seem. He said the burden of these tariffs will likely fall on consumers.
“For most consumers, for most businesses, the people who are going to be paying those tariffs are the consumers in the country that is bringing in those products,” said Wilson. “So we may actually see higher prices with a lot of goods that are coming in from overseas.”
The impact on consumers is already becoming apparent. Two shoppers we spoke to expressed concerns about the future.
“Things are going to cost more for a long time — the next four years are probably going to be very rough," said Logan Beiting.
"It's grandstanding it's trying to get these concessions from other countries based on these other things," said Brendan Pulte.
U.S. Commerce Secretary Howard Lutnick advocated for why tariffs would benefit the U.S.
"So the idea is come to America, build greatness in America, build for the American customers, in order to bring production to America," he said.
Wilson said that theory will be tested, but only time will tell if that's the case.
"It can be good because in some cases those companies that were selling into the United States may now decide well it's just better to build a factory here,to higher people here locally to produce those goods and then sell within the domestic market," said Wilson.
However, he said uprooting a business is a big commitment, and business owners may not see a return on their investments for years or even decades.
"I think it's going to be really hard to tell as of today if this is going to be a good or a bad thing we really have to see it play out," said Wilson. "See what the market does, see what industries do, and also see what those consumers are going to change in their own behavior when they go to Target, and Kroger and Walmart and so forth."
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