UC Merced Associate Professor Greg Wright says the latest round of tariffs on U.S. imports is designed to match what other countries charge on American exports.
“The message coming out of the White House is that other countries have relatively high tariffs on specific products compared to the tariffs that we place on their products. And so, the answer is to reciprocate,” he explained. “We’ve already seen that people are very nervous. Investors aren’t making investments. Consumer sentiment is down. The stock market is down.”
He believes confusion about the tariffs may potentially bring down how people feel about the economy.
“I think just the initial signs, just in terms of the anticipation of these tariffs, suggest that it’s probably going to be bad for the economy,” he said. “I think that on the one hand, you know, using tariffs as a negotiating tactic can be effective, but on the other hand, it just adds so much uncertainty in the business environment that it just causes businesses to pull back their investments, to just take a ‘wait and see’ perspective. But you don’t know if you’re waiting and seeing for three weeks or three months or a year or what. So I think uncertainty is really the thing that’s driving a lot of like, the decline in consumer sentiment and business sentiment at the moment.”
Wright says one thing Americans can expect is higher prices.
“Tariffs will directly raise the price that we pay for foreign goods. Obviously, the foreign producers now have to pay, let’s say, 25% more to sell their products in our country. And so, to some extent, those producers will pass that tariff cost on to U.S. consumers,” he explained.
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