05-04-2025
NNY business leaders, economists, policymakers worry Trump tariffs will prompt higher prices, less trade
Apr. 4—President Donald J. Trump's latest round of sweeping tariffs, set to make the United States the most expensive country to do international business with, started their phase-in at midnight Saturday, and economic experts are anticipating devastating impacts to the American economy.
Trump announced a plan Wednesday for sweeping new import taxes on a vast majority of the goods imported into the U.S. — making the case that his administration was offering a "discounted rate" compared to the tariff rates foreign countries charge the U.S., and that doing so would spur a new era of American domestic manufacturing.
He laid out tariffs of 10% on a majority of countries, with specifically higher rates for a select few including those in the European Union at 20%, China at 34%, Vietnam at 46% and Taiwan at 32%. These new import duties stack onto existing import taxes already in place, which means the Chinese tariff rate is closer to 54% in total. The 10% tariffs go into effect Saturday, with higher rates in effect on April 9.
But in truth the Trump tariffs are not at all connected to the actual tax rates other countries charge on American exports to their markets. The actual formula for these tariffs takes the target country's trade deficit, divides it by its exports to the U.S. and then halves that result.
Mexico and Canada are exempted from these new tariffs, but are still subject to a 25% tariff on goods not considered "USMCA compliant," which typically means any goods not wholly made in North America, plus a 25% tariff on steel, aluminum and automobiles from Canada. Those taxes were levied last month, after Trump threatened broader 25% tariffs on all goods from both nations, which are the U.S. primary trading partners.
In the north country and New York, those Canadian tariffs have been the main concern for most business leaders and government officials. Senate Minority Leader Charles E. Schumer has called on Trump to reverse course on the Canadian tariffs, and the North Country Chamber of Commerce has said trade barriers with Canada would decimate the regional economy.
"97% of area businesses expressed opposition to U.S. tariffs on Canada in our 2025 Issue Survey and with good reason," said Garry Douglas, president of the chamber. "It's because no other area in the country is more economically and socially connected with Canada or serves as a better microcosm of why a trade war with our northern friends is just a bad thing binationally."
Douglas said he was disappointed to see that Trump didn't reverse the limited tariffs in place with Canada in his announcement this week.
"We call for the U.S. to step back and hit pause in the case of Canada, await the Canadian election in a few weeks, and then engage in a bilateral dialogue," Douglas said. "Without this, we face growing disruptions in manufacturing supply chains, spring and summer construction, energy costs, and tourism."
Trump's Canada tariffs are unpopular in Congress, with the U.S. Senate voting on Wednesday to reverse the 25% tariff on non-USMCA compliant goods.
The resolution only asks the administration to reverse course and doesn't order it, and is unlikely to see a vote in the Republican-controlled House, but four Republicans in the Senate voted with all Democrats to pass it.
As for the wider tariffs, Senate leaders started working on a measure that would limit presidential power to impose the import taxes, requiring that both the House and Senate vote to approve of any new tariff plans within 60 days of their implementation, or they would be revoked.
Congress under the Constitution maintains the sole right to implement tariffs as a tax — through the usual process that requires tax legislation start in the House. But it has long delegated the power to impose import and export taxes to the presidency — a move that Senate President Pro Tempore Chuck Grassley, R-Iowa, said should be reversed.
"Congress has a constitutional role through the Commerce Clause on trade matters, and we should re-assume that role," Grassley said on a call with reporters Tuesday, a recording of which was obtained by the Watertown Daily Times.
Tariffs are simply taxes, and Bright A. Osei, associate professor of economics at SUNY Canton, said there's not much evidence that such broadly implemented tariffs are a good way to achieve the president's goals of rebuilding the American economy.
"Tariffs are basically taxes, and the impact on the consumer is well documented," he said. "There is maybe some increase in productive activities, production, but across the board we are not sure as to how this will increase overall domestic production."
Osei said the first round of Trump tariffs passed in 2018 didn't manage to greatly boost the U.S. manufacturing sector, and the COVID-19 pandemic onset in 2020 made sure that any incremental progress on that front was erased.
Most likely, Osei said these tariffs will lead to a reduction in economic activity rather than a boost — in part because Trump's tariffs are being charged on all goods brought into the country rather than competitive ones or ones the U.S. already produces.
Dylan Hewitt, a former deputy assistant U.S. trade representative, worked on tariffs in the Biden White House, and said these Trump plans break all the traditional rules about trade policy.
"What we're seeing now is that this trade policy is turning into an SOS moment for our economy," he said. "This approach is chaotic, it's playing games with the economy like a yo-yo, the will he or won't he of these tariffs. There's no strategy, there's no vision here."
Hewitt said that tariffs in the modern globalized economy can be used to protect domestic production when paired with strong pro-worker, pro-business policies that do something to boost the sectors that are meant to be protected. But without a targeted approach that weighs what the country is able to do on its own, and lays out a path of multiple inter-twined policies, tariffs will do more to hurt than help.
"To create a successful economic policy, you have to take a step back and look at the economy as a whole, you have to look at your families, your workers, your farmers," he said.
Hewitt said that it's particularly concerning that the Trump administration is taxing products the U.S. cannot produce domestically — raw materials like coffee that have no domestic sources whatsoever.
"Tariffing coffee from South America limits our ability to get specific goods that we can't grow here," Hewitt said. "That will just drive prices up."
Hewitt said he was worried about the future of the north country. The region has already had its industrial capacity hollowed out by years of disinvestment, free trade policies and a general shift in the manufacturing base in the U.S.
Coupled with the reciprocal tariffs countries are now putting in place on American products, including agriculture products like those produced in NNY, Hewitt said balance sheets are likely to get tighter in the coming weeks and months.
"I am really worried about our farmers and their ability to do commerce at the northern border, but just generally, generally competing in a global market," he said. "And I'm worried about our families, who you know will immediately face rising costs and don't really have all that much other economic relief."
