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‘A war on the poor': How tariffs hit low-income residents hardest

Advertisement Add that to the many services for low-income families that are on the chopping block, such as SNAP, WIC, Section 8 housing vouchers, and Medicaid, said Viviana Abreu-Hernández, president of Massachusetts Budget and Policy Center, and the impact is remarkable: 'This is a war on the poor.' Get Starting Point A guide through the most important stories of the morning, delivered Monday through Friday. Enter Email Sign Up The Globe spoke to Abreu-Hernández, Adam Hersh at the Economic Policy Institute, and Ryan Young at the Competitive Enterprise Institute to learn more about the effect tariffs will have on vulnerable people. Boston Globe: How will lower-income people be affected in the checkout line? Viviana Abreu-Hernández: Poor people tend to rely on imported products that are significantly cheaper. Where do they go to do their shopping? They don't go to Target, they go to the dollar store, and everything at the dollar store is made in China, it's made in Vietnam, it's made in Indonesia. … There are places in this country where the closest grocery store is a 90-mile drive. Poor people buy their groceries at the dollar store. They have pizza, they have ice cream, they have frozen food, they have canned food. … They sell everything from socks and T-shirts and bulbs to birthday things and cleaning products. Advertisement Ryan Young: If a good is worth less than $800, then you can ship it into the country duty-free. So companies like Temu and Shein from China, if it's just one person buying a shirt or a dress or something, that can enter the country duty-free. Early on, the Trump administration tried to do away with that, so those goods would now be tariffed. They drew it back because that is 1.4 billion packages per year that would have to be inspected. And Customs and Border Patrol simply does not have the resources to do that. Part of [Trump's so-called] Liberation Day, and this is going under the radar, is that he is once again going to try and do away with that. BG: What's going to happen to the cost of clothing? Adam Hersch: A number of countries where we get a lot of consumer goods from, particularly … footwear and apparel, and lower-end consumer goods from Southeast Asia, they are getting hit with the highest tariffs. They also are some of the poorest countries: Vietnam, Cambodia, Laos are singled out for some of the highest tariff rates. RY: A lot of people are scrambling to do [back to school] shopping now before the tariffs fully phase in. But if you're in a paycheck-to-paycheck situation, you might not be able to get your kids' back-to-school clothes now, in April, for something that's not going to happen until August. Advertisement BG: How about groceries? RY: Things like canned goods, things with a long shelf life, might be good to stock up on now if you can. A lot of fresh produce, especially stuff that's out of season in the US but might be [in season] in say, South America, because they have such a short shelf life, those prices are going to go up quickly. BG: Housing is a huge cost in Massachusetts. Will that go up? AH: We import a lot of building supplies. So that's going to slow down the construction of new housing. We already have housing shortages in most places, which is why we have such high housing costs. BG: Many people rely on their cars to get to work. Will those costs rise too? AH: With the tariffs on autos, we're going to see prices of new cars go up, but we're also going to see prices of used cars go up because when the new cars are expensive, few people can afford them. There's going to be a shift in demand toward used cars. During the pandemic, when there was an auto shortage, new car prices went up but the used car prices went up like crazy. BG: What about small businesses, many of which are owned by lower-income people of color? VAH: The mom-and-pop shops that import goods from abroad and sell to the poorest people, they're going to either make no margins, they're not going to be able to afford the product, and the consumers are not going to be able to buy products. Advertisement AH: Small businesses are going to be much less able to handle financially this shock from the tariffs, so it's likely that we're going to see a lot more of what we call business deaths — small businesses going out of business or being bought up by big business, and fewer business starts from small-business entrepreneurs. So we're going to see an increasing market concentration in monopolistic firms and that's going to tend to raise prices for consumers. BG: Will prices for domestic goods take a hit? RY: Domestic steel producers can raise their prices now without fear of being undercut and that's exactly what we saw the last time there were steel tariffs in Trump's first term. Even domestic goods, many of them will go up in price, even if there's no tariff on those goods … because they can get away with it. BG: Why is it that the most vulnerable populations are affected the most by economic headwinds? VAH: This is affecting the people that are not invited to the decision-making table. These are the people that do not have the means to lobby the House and the Senate. AH: By definition, they have the least power and the least access to opportunities to insulate themselves from these problems. When we have an economic slowdown or go into recession, it's always low-income workers, people of color, women, young workers, who bear the brunt of the costs of those downturns. This story was produced by the Globe's team, which covers the racial wealth gap in Greater Boston. 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