Features

The U.S. and Tariffs: A Tumultuous Journey

By Ewan Moe (emoe3@css.edu)

April 17, 2025

Over the past few months, tariffs have been a topic of contention in the U.S. From neighbors Canada and Mexico to uninhabited islands, almost the entire world has been impacted.

Despite the amount of news reported about them, many people are in the dark about tariffs. Effectively, a tariff is a tax on foreign goods imported to the country of origin, in this case, the United States. Typically, specific items are tariffed for easier production and consumption of U.S. manufactured goods. The recent policies, however, have been anything but typical. Professor Robert Hoffman teaches courses in economics and finance at The College of Saint Scholastica and has a PhD in Economics from Boston College. He worries about how and why these new tariffs were imposed.

“As something that probably hasn't happened since the late 1800s, with not only the value of the tariffs but the fact that they were being imposed on so many countries, it’s difficult to determine exactly what the policy objective is. The only way that it makes any sense is that their belief is that they want to get rid of trade deficits. If that’s the policy, it makes sense to how they were imposed but doesn’t make sense in achieving that objective,” said Hoffman.

The first wave of high-profile tariffs came on Feb. 1, with goods being taxed at a 25% rate from both Canada & Mexico, some of America’s closest trade partners. The move proved extremely controversial as Canadian officials pledged to launch retaliatory tariffs if nothing was done. Only two days later, the tariffs were paused for one month.

On March 4, the tariffs were officially enacted, causing panic in the market, with key indexes dropping trillions in value as the U.S. threatened further global tariffs. Whether it be strategically or to slow the descent, the U.S. exempted many goods from the tax, though not outright abandoning them. 

This uncertainty about the future is cause for concern. If domestic companies look to make long-term trade deals for foreign goods, they don’t know what the potential future costs could be.

“I think it’s an awful thing because it creates a high level of uncertainty. Talk to any business person; what they don't like is uncertainty. They can deal with risk but with uncertainty they can’t even plan what’s likely or unlikely to happen,” said Hoffman.

Following this, the rest of the world was soon slammed with tariffs, announced on April 2. The scope of which was unheard of in recent history, with 10% baseline tariffs put in place for every country with additional higher rates for countries the U.S. faces a trade deficit with. Some of our closest trade partners—the EU, Vietnam, South Korea, Japan, and Taiwan—were hit with tariffs ranging from 20-46%. The markets responded swiftly with massive dips for U.S. stocks along with huge slides in stock markets across Southeast Asia. 

On Apr. 9, this policy was officially enacted, leaving people across the globe concerned over the future of trade and a looming recession. Mere hours after these tariffs were put in place, it was announced that there would be a 90-day pause to allow for negotiations. The administration maintains that this was part of the plan, though others are skeptical about the authenticity of that claim.

“I don’t think this was planned at all. What happened after the announcement was the financial markets sending a clear message that they didn’t think these tariffs made any sense. However, that message was finally conveyed to Trump; it’s clear that someone made clear to him we’re on the edge of enormous economic turmoil that will have huge damages on the economy and the world,” said Hoffman.  

The effective 90-day pause leads to the question of what will happen when the pause runs out. It’s unlikely that in that time, the U.S. could make such strides in terms of trade agreements with these countries that it would justify a full reversal of policy. However, the 10% global tariffs and over 100% tariffs on China could serve as a last attempt to change the minds of the white house.

 If goods start to become increasingly more expensive, the public outcry might be too much to justify continuing this trade war. The pause ends July 8, and by then, it’s tough to predict what will happen. A lot has changed in the first three months of this new presidency, and more is sure to follow in the next three.