What could a possible tariff increase look like for Tennesseans?

JACKSON, Tenn. — With the recent talk on tariffs, you may be wondering what tariffs are and how they impact you.

If the next 30 days take an unexpected turn for the United States, it may affect Tennesseans in a way that could be surprising. We spoke with Economics and Business Analytics Professor Charlie Smith at Freed-Hardeman University on this topic.

“Tariffs are attacks on imports so if I buy a $100 worth of lumber from Canada then that’s going to be an extra 25% for the person bringing in that material from an extra country. So it just adds to the expenses of the good when there’s an extra tax on it,” said Smith.

For local business and corporations, we can see a higher tax on some items while shopping. Mexico, Canada and China are the United States’ biggest trade partners –trading food, gas, car parts and more items.

For those who may want to buy a car at some point this year it may affect you.

“So for consumers, presumably if you’re that company that pays that tariff you could eat the cost but probably not. Probably you’re going to add that cost to the price of your good, and so eventually, it may not be tomorrow. For like a car, if cars are already here they’re not going to face a higher cost but as they bring in new cars if part remains in Canada and Mexico is going to cost more,” said Smith.

As of now, it’s unsure exactly how the tariffs will affect each Tennessean. The impact from the increase of tariffs can have a prolonged effect.

“Maybe we import more items from Brazil or something like that, it’s going to be really complicated and so you just can’t say ‘one item price is going to go up’ everything is going to go up 25%, it’s going to be really complex. In general, we can say that prices are going to go up at first, hopefully supplies increases something off sets that price increase some in the long term,” said Smith.

A tariff increase could not only impact our economy but also other countries involved. Before the talks between the U.S. and Canada Monday, Canada’s prime minister mentioned an increase tax on United States products that are sold in Canada.

“In that case Canada buys less of our stuff, we buy less of Canada stuff and so that’s negative and that both sides economies have less sales which leaves a slower economic growth potentially because of those extra taxes and higher prices,” said Smith.

However, there could be an economic boom in the distant future for America.

“Eventually here’s the hope is that us suppliers make most of those goods and if the supply increases eventually we make more things in the United States then the price can go back down. But that takes time to increase our capacity to make things here in the United States,” said Smith.

Currently, there is still a 10% charge on goods imported from China.

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