By Christopher Young
Contributing Writer
Briefing Introduction: On April 2, President Donald Trump announced, “Liberation Day,” signaling his intent to impose tariffs on at least 90 countries. Trump has said his sweeping tariffs plan will generate revenue, while also countering allegedly unfair trading practices. In this week’s national briefing, speakers will discuss whether the President can successfully negotiate his tariffs plan, especially in the key economies of China, India, Brazil, and Mexico. Speakers will also discuss the impacts of tariffs for American consumers, the labor force, and small businesses.
Weekly briefing moderator, Sunita Sohrabji, is also co-producer of the weekly national briefing series, along with Pilar Marrero. She introduced the panelists for this session and invited Dr. Neale Mahoney, Director of the Stanford Institute for Economic Policy Research and Professor of Economics at Stanford, to begin. “Today the tariffs are higher than they have been since the 1930’s and ten times higher than they have roughly been for most of my lifetime; recent data shows businesses and especially small businesses are severely impacted (roughly half of all impacts are on small businesses making it harder for them to operate).
Tariffs are a tax on consumer goods. We are expecting to see higher prices on the labor market and job growth was steadily increasing until January of this year. Many firms have frozen the hiring process. If you think back to October of 2024, you may recall that the tariffs and the uncertainty has squandered this advantage. Last year the economy grew at a rate of 2.5percent, this year it stands at 1.2percent. Last year consumer spending was at 3 percent, this year it is flatlined. Inflation decreased last year, this year, there’s an uptick. This is self-inflicted. If we turn the page back on tariffs by locking them in or rolling them back, I think the economy would slowly recover…sadly we are seeing distractions by Trump on the economy and efforts to bury the less flattering data,” Mahoney shared.
Included among the many questions from 72 media outlets on the call, Mahoney took a question from The Mississippi Link newspaper. “It seems like we hear a lot of people saying – well we just need to give this time, these tariffs, it’s just a cycle we are going through, it’s not that big a deal. Do you find that is a dangerous mindset?” Mahoney replied, “Yes and I think one of the reasons why is that the uncertainty is paralyzing the economy. If you are a small business and you don’t know what your costs will be for your inputs you will be reluctant to hire a new worker or expand your facility. If you are a consumer and you don’t know if layoffs are coming, you’re going to hold off on a vacation, a night out, or a new car purchase. This environment we are in with on-again off-again tariffs, I understand that the administration frames this as sort of the art of negotiation but it’s really freezing the economy in troubling ways.”
Dr. Anil Deolalikar, Professor of Economics at the University of California Riverside, and Founding Dean Emeritus, UCR School of Public Policy, spoke on the likely impacts of these tariffs on the major economies of the U.S. India, Brazil, and China. And on the topic of tariff negotiations with these emerging economies. “We don’t really know the exact impacts without knowing where the tariffs will end up…these countries are large and domestically focused and will be a smaller percentage of their GDP’s…the tariffs are only on goods, not on services…U.S. exports because of total GDP of these counties are 2 percent for India and Brazil and 3 percent for China. There are many carveouts, including cellphones. The Chinese economy has slowed, unemployment, especially for youth is increasing. My bottom line is that US and China are extremely likely to negotiate a truce because they are so interdependent. With India and Brazil, it is less so.”
Dilawar Syed, who holds an MBA and is the former Deputy Administrator, US Small Business Administration, discussed the tariff impacts on small businesses. “The largest job creators in America are from small businesses. You need certainty and clarity, and we don’t have that right now. 97 percent of all importers in the U.S. are small businesses, two-thirds of U.S. small businesses export and so tariffs are a small business problem. Does anyone in this administration understand how to run a business? Small business sentiment is at its lowest in 15 years, and that includes the Great Recession and the pandemic. 58 percent are saying they are worse off today than they were a year ago, and here we have a President that ran on improving the economy. The SBA is not helping when they usually do. 43 percent of SBA workforce has been laid off. I want people to know that your voice matters. We are a democracy.”
Marcus Bowers, Co-founder of She’s Happy Hair in Houston, was the final speaker. “I like to tell people that I’m a globalpreneur, not an entrepreneur. In 2012 we jumped into the beauty supply and hair industry when it wasn’t an industry and so we created one. Instead of marketing the product only, we started marketing the product, services, the operations and expectations; customers started flocking to us. We even finance hair extensions now. We cornered the market with $75 bundles, and we had great volume. We created a Happy Kit, certain lengths, 18, 20, 22-inch lengths. With tariffs we must deal with suppliers. I don’t expect raw product to ever be made in the U.S.; American workers don’t want to do those jobs. Packaging and branding could be done here, but that’s about it. We have diversified our supply chain and now do less business with India and more with China. During COVID they said we were not essential, but they were wrong. Even though people weren’t going into the office, they still wanted to look their best online, Zoom calls, etc.”
This week’s national briefing can be viewed in its entirety at https://americancommunitymedia.org/media-briefings/the-wide-reaching-impacts-of-trumps-tariffs-plan.
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