Tariffs may seem inconsequential in the short term, but they often shape the prices we pay and the products we see on shelves. As President Trump’s new tariff proposals make headlines, understanding how they work and who they affect is more relevant than ever. As of May 27, 2025, the majority of tariffs on imported goods have been put on hold.
In simple terms, a tariff is merely a tax on either exports or imports coming into the country, social studies teacher Roy Huang said. The goods with a tariff placed will see a price increase to whatever percentage that the President or Congress sets when the goods enter the country, Huang added.
“The main reason (for a country to impose tariffs) is to discourage the sale of this particular good or service,” Huang said. “So, for this presidency, the tariff is basically to discourage trading or buying products from these specific countries.”
The end result of a tariff is usually to protect domestic industries and domestic workers, social studies teacher Champ Wrencher said. Products arriving from other nations may be cheaper and would compete against domestic products, and therefore the consumer would have free choice to pick the cheaper item, Wrencher added.
“(Consumers) will often choose something that may be manufactured somewhere else, and that causes a domino effect – lack of sales for the domestic company – and then that leads to a lack of productivity, which could eventually lead to higher prices and layoffs as that company struggles to compete with a foreign competitor,” Wrencher said.
Although tariffs theoretically should be a boon for the economy in the long term, there is often a spike in prices in the short term, Wrencher said.
“As people brace for it (tariffs), demand will go up for certain products because they don’t know when prices will ever be that low again,” Wrencher said. “So that ironically, drives up the price. And so you’re seeing an increase in demand, which leads to an increase in prices, which is all part of a transition.”
The Smoot-Hawley Tariff Act of 1930 is an example of an economic blunder by the United States in the early part of the Great Depression, worsening the effects of the Great Depression for farmers, social studies teacher Paul Harrison said. By imposing tariffs on multiple countries, including friendly nations like Canada, the U.S. hurt their own agricultural industry, he added. A similar situation is occurring right now between the U.S. and China, he said.
“So right now, farmers are starting to get nervous because we export a ton of soybeans to China, and pork, tons of pork,” Harrison said. “Because of the tariffs by the U.S., (China) has raised all these tariffs on those agricultural goods (…) If this continues, the farmers are going to have to destroy their product, or otherwise they’ll flood the market and totally destroy the price of it.”
Wrencher recommends the St. Louis Federal Reserve website for anyone who wants to learn more about important economic topics, he said. It is vital for young people to understand tariffs and trade policy, even if they don’t plan on studying economics or related topics, to ensure they are successful in life and aren’t taken advantage of, he added.
“One of the most important things that people need to learn is to conserve, curb their desire to consume, to buy things,” Wrencher said. “Why would you pay to go to a park and take a hike when you can just take a walk around your neighborhood, when there’s a perfectly free park right there (…) We believe inherently that if we don’t pay for it, it’s not quality. We think we have to spend it, to have some kind of merit or a real impact on us, and that is a detriment to our wallet because we’re fooled into thinking we have to pay for everything.”
Economic sanctions, including embargos (which are physically blocking trade routes), can be acts of war, Wrencher said. The main difference between sanctions and tariffs, and other forms of trade restrictions is the intensity of economic disagreement; trade wars essentially boil down to economic disagreements between nations, Wrencher added.
“We (USA) levy tariffs on other countries, they reciprocate, and so they will offset each other, unless one country continues to outdo the other,” Wrencher said. “ So we lay down 100% tariff on goods, then the other country where those goods come from, they lay down 125% tariffs (…) and what you’re hoping is that maybe this will lead to negotiations, and when people see that it’s a never ending escalating amount, it could cause further damage to the economy.”
Industries like clothing, retail, automotives, and technology have taken the biggest hits with the current tariffs, Wrencher said. It is important for students to remain aware of tariffs as they cause variable prices, and students still have to make purchases, Wrencher added.
“The average consumer goods are going to be impacted, because it’s difficult to find something that totally originates from here ( the United States),” Wrencher said. “Something as simple as a pencil draws components from many different places. (…) We may find one or two things here in the states, but the rest comes from everywhere else.”