MET’s Faculty Angle: Financial Consequences of Trump’s Tariff Policies
As part of his administration’s initial policy rollout in his first month in office, President Trump has levied or threatened to levy stiff tariffs against trade partner nations Canada, Mexico, and China, among others. Metropolitan College’s Faculty Angle series recently explored the overall nature of tariffs—from their common uses to their tradeoffs. Now, in the latest Faculty Angle videos from MET, Professor Irena Vodenska goes in depth on the ramifications of President Trump’s tariff policies.
In Part 1, Professor Vodenska, who is MET’s director of finance programs and chairs the Department of Administrative Sciences, outlines the parameters of President Trump’s international tariffs, from the intentions behind them to their most likely consequences. “One of the primary concerns surrounding the tariffs is their effect on economic growth,” she says. “By imposing tariffs, the cost of . . . goods will rise, leading to inflationary pressure on the economy.”
But how will President Trump’s tariff policies impact the average consumer? In Part 2, Professor Vodenska explains that the buying public should expect to see higher prices. As tariffs will bring rising prices on goods, consumers are likely to see that spike passed down by companies—particularly in the realm of essentials. “There is an estimated average effect on American households that they could face an additional $1,000 or $1,200 in annual costs due to these tariffs,” Professor Vodenska attests, adding that she expects this to offset any benefits the tariffs present.
“Tariffs are rarely imposed in isolation,” Professor Vodenska says in Part 3 of the Trump tariffs series, which examines the potential unintended consequences for the United States’ biggest trade partners. Warning of the potential for a trade war, Professor Vodenska says, “A prolonged trade conflict could disrupt global supply chains, create instability in international markets, and [create] instability geopolitically.”
But what do tariffs mean to the strength of the US dollar? In Part 4 of this series, Professor Vodenska explains that while President Trump’s policy on tariffs may strengthen the US dollar, that development may present drawbacks to the economy. “While tariffs may reduce the trade deficit by discouraging imports, they will also make everyday goods more expensive, reducing consumer purchasing power,” she says.
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