Economists are raising questions about tariffs’ long-term impact on inflation, trade relationships and household budgets.
MACON, Ga. — Tariffs on imports from Mexico and Canada were set to take effect at midnight, but a last-minute agreement with the U.S. government has put them on hold for 30 days.
China’s tariffs are still a go, though; the country retaliated in the last 24 hours, imposing tariffs on American imports into the East-Asian country.
While this pause eases immediate concerns about goods coming and going through the country’s northern and southern borders, economists say businesses and consumers will still feel an effect as the tariffs on China kick in.
Economists are raising questions about the tariffs’ long-term impact on inflation, trade relationships and household budgets.
“Economists disagree on many things,” Mercer University Economic Professor Antonio Saravia said. “But if you ask us about tariffs, 99.9% of economists will tell you they are bad.”
Simply put, tariffs are taxes on imported goods, designed to protect domestic industries by making foreign products more expensive.
While tariffs on Mexico and Canada are paused, those on Chinese goods will move forward, adding a 10% tax on affected imports. Once shipments arrive at U.S. ports, customs officials will begin taxing importers, and within a week, consumers could start seeing price increases on store shelves.
While they may benefit some U.S. businesses by making foreign goods more expensive, they can also drive up costs for consumers.
“The threat is a trade war, and that hurts all countries equally,” Middle Georgia State Economics Professor Greg George said. “It’s like pulling the pin on a grenade and saying, ‘If you don’t play by my rules, I’m going to blow up everything.’”
The Trump administration has positioned the tariffs against China, Mexico and Canada as retaliation for illegal immigration, drug trafficking and trade deficits. A trade deficit is when a country imports more goods and services than it exports.
The U.S. produces many goods, including construction materials and pharmaceuticals, but American consumers still rely heavily on imports for essentials like energy, clothing and food. According to economists at Mercer University and Middle Georgia State University, history shows that tariffs trigger two major ripple effects.
Higher Prices for U.S. Consumers – Tariffs increase costs for importers, who pass those costs on to businesses and shoppers.
Strain on Exporting Economies – As American consumers buy less due to higher prices, foreign economies that rely on U.S. trade take a hit.
Trading partners often respond to U.S. tariffs by imposing their own, making American exports more expensive overseas.
In the last 24 hours, China responded with countermeasures, escalating fears of a trade war.
Experts warn that a prolonged tariff battle could weaken global trade, forcing industries to shift production to less efficient locations, driving costs higher for everyone.
Most economists agree: expect price hikes.
“The losses are much greater than the gains,” George said. “You might see small gains in one industry, but tremendous losses across the economy.”
For now, Mexico and Canada have dodged tariffs, but the situation remains fluid.
If negotiations break down, import taxes could still be implemented in the coming weeks.
Meanwhile, China’s tariffs are set to move forward, and their economic impact will unfold as new shipments arrive.
As businesses and consumers brace for potential price hikes, we’ll continue to monitor how these trade policies affect Central Georgia and beyond.