Trump's Tariff Turbulence: How will they Affect you?
- armantabesh
- Apr 9
- 5 min read
Overview
Headlines these past two weeks have circled around Donald Trump’s tariff run. As of April 9th, 2025, Trump has a 125% tariff on China but has halted all other tariffs to Mexico, Canada, the European Union and more for a 90 day period. Since this news, the S&P 500 had its best one-day gain since the recovery of the 2008 financial crisis. Trump, who last week exclaimed, ‘MY POLICIES WILL NEVER CHANGE!’ acknowledged that the recent economic downturn influenced his decision. Experts say that growing concern in Trump’s treasury department over the U.S.’s economic state was the primary factor for the pause.
What Exactly is a Tariff?
A tariff is essentially a tax imposed on imported goods when they cross into a country. Tariffs are usually calculated as a percentage of the declared value of the goods. The primary function of tariffs are…
They are designed to protect domestic industries by making imported goods more expensive than local products
They generate revenue for the government.
Why Would the U.S. Want to Impose Them?
There are several strategic reasons why the U.S., under Trump’s leadership, has chosen to impose these massive tariffs. First, the idea was to address the Trump administration’s perception that trade had been skewed in favor of foreign competitors, resulting in significant trade deficits with other countries(mostly China). Last year, the U.S. imported about $1 trillion worth of goods more than it exported. By imposing tariffs, the Trump administration is encouraging U.S. consumers and businesses to purchase domestically made goods, as opposed to international commodities. Trump is essentially hoping to end U.S. reliance on international goods, which is a problem that led to economic problems in the past.
Furthermore, tariffs, for the U.S., are being used as a form of economic leverage. By raising the cost of imports, the U.S. is trying to get its trading partners to come to the negotiating table and offer more favorable trade agreements.
Another significant factor was the desire to promote domestic job growth and stimulate manufacturing within the United States. With the U.S. being hit hard by deindustrialization, tariffs show the U.S.’s hope to stimulate job opportunities and the U.S. manufacturing. The tariffs are supposed to provide a boost to sectors like steel and automotive manufacturing, which have been under pressure from international producers.
Economists have had issues with these tariffs, though. They have issues with Trump using tariffs to target all foreign trade flows indiscriminately, without regard for how strategic the good is to the United States or even whether the U.S. can actually make it. The U.S.’s closest allies like Mexico, Canada, and Europe are now trade enemies because they sell more than buy. Economists say that the formula that Trump is using to calculate the tariffs is far too oversimplified. It is a nuanced subject that should be handled in a way that every country’s tariffs should be implemented with an understanding of the goods that are being traded. Mary Lovely, a senior fellow at the Peterson Institute for International Economics said, “How will U.S. supply respond to higher tariffs on cocoa and natural rubber from Cote d’Ivoire? The same way it responds to higher tariffs on machinery from Europe?”
Effects on U.S. Markets: Gas, Food, Cars, and More
The ripple effects of these massive tariffs have been far-reaching across various sectors of the economy. One of the most noticeable impacts has been on the energy market, particularly on crude oil. Oil prices have dropped significantly in the past weeks but stabilized once Trump put his tariff halt on. However, gas prices have not moved that drastically; experts say that there might be a drop in gas prices soon.
The food market has also been affected. Many food items in the U.S. come from imported ingredients or are in conjunction with global supply chains for materials such as aluminum and plastic. Experts say shoppers can expect to see prices rise on seafood, coffee, fruit, cheese, nuts, candy bars and other imported foods. Additionally, agricultural exports will be hit hard and produce prices will rise. The Trump administration says that on average, prices will go up only about 4%. However, some groceries could go up as much as 50% for items that mostly come from foreign countries.
The automotive sector is yet another industry that will see some big changes due to the tariffs. About 45% of vehicles being sold in the U.S. are imported. Toyota, Honda, BMW, Mercedes-Benz, and Volkswagen are all run outside the United States. Even cars manufactured domestically are made with materials and parts that are sourced globally. Manufacturers are forced to pass these costs on to consumers. These tariffs are paving the way for a shift in the U.S. automotive market, which many say needs to step away from an international reliance.
Impact on the Healthcare System
But perhaps one of the most critical areas affected by tariffs in relation to public health is the U.S. healthcare system. Healthcare in the U.S. is characterized by its high costs and complex supply chain. Moreover, many medical devices, pharmaceuticals, and even essential hospital supplies depend on international manufacturing. When tariffs are inevitably applied to these goods, the overall cost structure of the healthcare industry could surge.
Items such as personal protective equipment(PPE), advanced diagnostic machinery, and even some generic pharmaceutical ingredients are often sourced from foreign countries. Tariffs on these products drive up their prices, which would in turn force healthcare providers to contend with higher operating costs. The cost would trickle down to patients, leading to higher treatment costs and increased insurance premiums.
Even though tariffs are intended to protect U.S. jobs and industries, they inadvertently burden sectors that are critical to public well-being. With healthcare being a prime example, there is growing concern that tariffs will exacerbate the ongoing challenges of rising healthcare costs. Hopefully, any short-term inflationary effects will be offset by longer-term gains. If domestic production for the healthcare industry can be revitalized, the healthcare industry, and the whole U.S., will eventually benefit from stronger supply chains without relying on foreign countries. However, the immediate reality is one where consumers might be forced to navigate a more expensive and uncertain economic environment.
Conclusion
Tariff Strategy: The Trump administration raised tariffs on Chinese goods to 125% while pausing tariffs on all other trading partners for 90 days.
Economic Catalyst: The temporary halt has led to a long-awaited boost in the U.S. stock market, with the S&P 500 having its biggest one-day gain since the recovery stage of the 2008 financial crisis.
Purpose of Tariffs: Tariffs are designed to protect domestic industries, generate government revenue, and be used as leverage when negotiating foreign trade deals.
Trade Balance Concerns: Trump hopes to address trade imbalances, particularly the significant trade deficit with China, by encouraging the consumption of U.S.-made goods. An additional goal is to stimulate domestic manufacturing and create jobs, particularly in sectors like steel and automotive.
Criticism from Economists: Experts warn that Trump’s tariff calculation oversimplifies complex international trade dynamics and will inadvertently hurt strategic industries.
Sectoral Impacts – Energy and Automotive: While the energy market saw a brief big drop in oil prices, other sectors like automotive have experienced increased costs due to reliance on imported parts and vehicles.
Effect on Consumer Goods: Many consumer goods, such as electronics and groceries have raised in price from the tariffs.
Healthcare System Concerns: Tariffs on countries that import medical supplies and pharmaceuticals could drive up healthcare costs, impacting both providers and patients.
Long-Term Outlook: Despite short-term price hikes and economic uncertainty, the administration, and America, hopes that bolstering domestic production will eventually lead to a more stable and self-reliant economy.
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