A new plan signed by President Donald Trump is ushering in more uncertainty surrounding tariffs, and the potential impact on what U.S. consumers pay for goods.
The president unveiled the plan that will enact so-called reciprocal tariffs. Those are import taxes imposed by the U.S. government that match tariffs or tax rates other countries place on American products.
"They charge us a tax or tariff and we charge them the exact same tax or tariff, very simple," the president said, signing a proclamation on reciprocal tariffs Thursday.
Trump administration officials insist the plan promotes fairness and U.S. job growth and potentially raises revenue for the U.S. government.
But some economists and industry insiders share the concern that the costs of tariffs could be passed to businesses and working families.
"These retaliatory tariffs will come at a price for the American people," said Sara Sadhwani, political science professor at Pomona College.
Rhett Buttle, founder and CEO of Public Private Strategies, also believes the proposed reciprocal tariffs could lead to higher costs for businesses.
"That's because many of the businesses do rely upon foreign products," he said. "This creates a challenge and a cost that businesses may have to pass to consumers."
Colin Grabow, the associate director at the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, told Scripps News he's skeptical of the administration's arguments that reciprocal tariffs will benefit U.S. manufacturers.
"I think there's certainly a reason to prepare, to give some thought, to think this isn't just an idle threat or idle chit-chat," Grabow said. "I think the president has demonstrated time and time again that he is a tariff enthusiast."
In the case of auto production, for example, Grabow said manufacturers are so heavily reliant on imported goods, "if those prices go up, that's going to make them less competitive," he said.
Instead of raising tariffs, Grabow suggests the opposite, "and trying to reduce our tariffs, reducing our foreign trade barriers, and making the United States a low-cost, more competitive place to do business," he said.
Buttle points to another potential challenge ahead.
"It could lead to businesses facing supply chain disruptions because they'll have to potentially search for alternative suppliers or other domestic options," he said.
The president himself addressed a certain level of uncertainty.
"Nobody really knows what is going to happen," he said, "other than we know that jobs are going to be produced at levels that we haven't seen before."
There is no single figure or percentage to put on these tariffs because the tariff increases will be customized for each country, potentially triggering trade negotiations with a number of nations.
Administration officials have been tasked with creating a report for the president on which countries should be targeted and the rates to apply.
That report is expected to be in the president's hands by April 1.
