How Tariffs Touch Your Life (And Wallet)

August 7, 2025

Recent tariff policies in the United States have evolved significantly, with the Trump administration reintroducing widespread tariffs in 2018, the Biden administration continuing their use, and new tariff actions emerging since Trump's return to office in 2025. Experts from UC San Diego, including economists, a political scientist, a finance professor, and a historian, provide insight into how these tariffs function as economic and foreign policy tools in today's global economy. Their analysis reveals that while tariffs may protect specific domestic industries and jobs, they typically result in reduced real income across all states, with potentially destabilizing effects on international trade relationships and global supply chains.

Who is affected

American consumers and businesses facing higher prices for imported goods
Domestic industries receiving protection through tariffs (like steel and aluminum manufacturers)
Downstream customers such as carmakers and shipbuilders who need steel and aluminum
Residents in every U.S. state experiencing reduced real income
Countries targeted by U.S. tariffs, including China, Canada, Mexico, and the EU
Alternative manufacturing hubs like Mexico and Vietnam benefiting from supply chain shifts
Global investors and financial markets responding to tariff-related uncertainty
International trading system and multilateral cooperation frameworks

What action is being taken

The U.S. is imposing sweeping tariffs on imports to address trade deficits and protect domestic industries
The U.S. introduced broad "reciprocal tariffs" and targeted measures against China, Canada, Mexico, and the EU in 2025
Trading partners are implementing swift retaliatory tariffs in response to U.S. actions
Global firms are reassessing their risk exposure and shifting production to alternative manufacturing hubs
Companies are actively re-routing supply chains away from China toward countries like Mexico and Vietnam
Advanced economies are expanding tariffs, subsidies, and industrial policies, often justifying them on national security grounds

Why it matters

The trend toward protectionism threatens policy predictability and stability that global trade relies on
Real income is dropping in every U.S. state despite some short-term job and wage gains in specific industries
The shift represents levels of economic uncertainty not seen since the 1930s
It erodes decades of multilateral cooperation established after the Great Depression
Market volatility could increase if trade negotiations encounter problems
Supply chain restructuring affects global economic power dynamics and investment patterns
The executive branch now controls tariff policy with minimal legislative oversight
What historically made economic sense decades ago may now produce "all pain, no real gain" in today's interconnected economy

What's next

No explicit next steps stated in the article

Read full article from source: The San Diego Voice & Viewpoint