From smartphones to coffee prices, the cost of goods in America is being reconfigured by an economic tool most Americans haven’t seen since the end of World War II: tariffs. Tariffs are taxes on exported products that, according to Senior Fellow at the American Enterprise Institute Derek Scissors, are intended to encourage domestic production.
On April 2, the Trump administration announced its plan to reverse its practice of open international trade and implement a 10% tax on all imports from other countries, with higher rates for specific countries, according to PBS News. The tariff’s took effect on April 5, with many Americans uncertain about their impact.
“These [tariffs] are hard to predict,” History Department Chair Carl Atwood said. “…There’s a lot of factors that have gone into the rise of American service industries and the decline of American manufacturing industries, and it’s hard to say that only tariff policy will make the changes that the administration states as being their goals.”
Researchers at the University of Pennsylvania anticipate national revenue to increase by over $5.2 trillion in the next ten years. However many economists have reported negative short term impacts on individuals, small businesses and the national economy due to anticipated increased prices and consequential decreased spending.
While prices on imported goods from all countries will increase, Scissors highlights the biggest area of concern as the Chinese tariffs. After the implementation of tariffs in early April, China responded by raising its import taxes as well, leading to extremely high tariffs from both countries. The United States had a 145% total tariff on Chinese imports from April 9 to May 11. However, after negotiations on May 11, China and the U.S. agreed to lower U.S. tariffs on Chinese imports to 30% starting May 14.
This tariff is higher than the baseline 10% tariff on other countries and will raise prices of Chinese imported goods, which make up 16% of American imports according to Reuters. Specifically, China is a large importer of a lot of technology. China imports 98% of lighting and 40% of smartphones imported to America, in addition to large amounts of clothing, baby products and more household goods, according to Reuters.
“You will notice some clothing is no longer on shelves, and you’ll notice how the clothing is more expensive,” Scissors said. “Much more subtle is that China also makes things that American companies use in their own production … In the extreme case where Chinese inputs to production also disappear, you could have companies in the area that say, ‘Sorry, I have to close down.’”
CESJDS Chief Financial and Operating Officer Elanit Jakabovics said that JDS hasn’t seen much of an impact on supplies yet, but has planned accordingly.
For example, in anticipation of increased technology prices, the JDS technology department has made all of next year’s purchases earlier than usual. In the case of increased prices of goods, the school hopes to minimize the impact on families, avoiding changes in areas such as tuition or lunch costs. Additionally, just as they did when JDS parents experienced sudden federal job losses, the school hopes to work with families if any changes impact their financial position.
“One of the big lessons or best practices, I would say, is just being there for our families,” Jakabovics said. “… If they reach out to us, we work with them, and we really want to hold their hand and walk through this experience together with them. Because we don’t want families to pull their kids out of JDS and have to go to public school or other schools that might be less expensive.”
