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Global Turmoil: The Real Cost of Modern Tariff Wars

  • Writer: Lincoln Seeger
    Lincoln Seeger
  • 9 hours ago
  • 8 min read

Let’s say you are selling me apples, but I tell you: “Every time I buy an apple, you have must give me $1 on top.” You’d likely be frustrated, right? This scenario represents tariffs, which are becoming a major part of global trade. The current administration has put tariffs, a tax on imported goods, on a multitude of countries. A major reason why the White House has put high tariffs on certain countries is because in their own words, “these tariffs seek to address the injustices of global trade, re-shore manufacturing, and drive economic growth for the American people.” (2025) This statement begs the question: are tariffs just an effective economic tool to bring money into a country, or do they do more harm than good when it comes to the global economy? Although these tariffs were placed to protect American industries, instead they have ruptured global supply chains and forced companies, organizations, and people to switch up their sourcing and economic strategies due to increased production costs, not exactly a job well-done.


Tariffs and Prices 

Tariffs cause countries to trade less with America, forcing prices to go up. There are many instances where current tariffs have increased prices, and a very prominent example is John Deere. John Deere, according to the Wall Street Journal, has taken in $500 million in costs from these tariffs, which has been a nightmare for the company. (Maurer, 2025) They have been forced to lay off workers and increase prices on their machinery to stay afloat. Not only have tariffs impacted these big companies, but also everyday citizens like you and me. The Tax Foundation reported that tariffs are essentially an indirect tax for us, making that weekly grocery trip a lot more stressful. (York, 2025) Also, when you cannot buy as much, less money goes into the economy, which creates a whole lot more problems than I can discuss in this article. Producers and consumers lose when people are taxed more while goods get more expensive: there is less money flowing into the economy as a result.


A demographic that tariffs greatly impact are the people who put food on our shelves: farmers. Farmers for Free Trade, a non-profit organization, that helps domestic farmers though advocating for trade agreements that benefit American agriculture. (Statement on tariff rollback on fertilizers., 2025) The organization explained that a big concern for farmers right now is that the tariffs being imposed are increasing input costs of producing crops and agricultural products. Specifically, farmers were especially worried about the 10-30% tariff on foreign fertilizer would impact the level they could produce at, as 54% of farmers were opposed to these tariffs.

(Poll shows waning farmer support for Trump tariffs , 2025) Noticing this mistake, the administration removed all tariffs on fertilizers. However, farmers are demanding more action from the administration. Bob Hemesath, a Farmers for Free Trade employee and a farmer from Iowa with 40,000 head hogs and a 2,800-acre corn field, put out a statement on the recent tariff changes: “We are pleased that President Trump has seen fit to rollback his tariffs on fertilizers. American farmers have been hammered by high input costs which has pushed rural America into a major farm crisis. Farmers also need to see a rollback in tariffs on all farm inputs including farm chemicals, tractor parts, steel and aluminum used for grain bins, fencing, and farm equipment.” This demographic has been hit especially hard because of how many tariffs have been placed on resources they need compared to other prefessions. Farmers are struggling with the uncertainty of the tariff situation and how they must pay more to get less.


How Tariffs Impact Supply Chains

Tariffs greatly disrupt global supply chains and their functionality. Currently, tariffs on China have been especially high and impactful: they are sitting at a 10% base rate and materials like steel, aluminum, automobile parts, wood and copper are even higher rates, some reaching up to a 50% tariff. (Genovese, 2025) It is expensive and complicated for companies to switch suppliers, so when tariffs hit, many companies are stuck in a tricky situation where they either need to keep what they have and struggle or reconstruct their supply chains if they can afford it. For example, Target has switched up its suppliers considering recent tariffs. According to Rick Gomez, Target’s Chief Commercial Officer, “about 60% of its products were coming out of China in 2017. Today, it’s around 30%, though Gomez said, “we are well on our way to be less than 25% by the end of next year.” In general, bigger companies have been able to switch their suppliers due to their immense amount of cash, but what about the smaller businesses? What about those who are not worth billions and billions of dollars?


Small business health is one of the most pressing issues when it comes to tariffs. While bigger companies can usually hold their own in this global phenomenon, small businesses aren’t as lucky. Small businesses are especially reliant on imports since they cannot produce goods themselves to the same extent as larger businesses and corporations. According to the FedEx Small Business Trade

Index, ~88% of small businesses are at least somewhat dependent on exports. (Trump tariff wars leave U.S., 2025)  With recent tariffs, dozens of small businesses have begun to crumble. Matt Katzman, owner of Velocity Steep, is anxious about how tariffs will impact the future of his business: "With 36% (38% with steel) [tariffs] for Thailand, we can’t survive, and at this point have stopped ordering any new products. The uncertainty is insanity and [the] back and forth is crushing small businesses like us....If nothing is done soon we will have to shut down our business.” (American workers, businesses, consumers and trade tariffs., 2025)  The implementation of these tariffs has created a survival of the fittest situation for American businesses, where innovation goes to die.


Tariffs with Historical Context

Also, tariffs historically have been detrimental to the global economy. The Smoot-Hawley Tariff Act of 1930, for example, amplified the effects of the Great Depression by decreasing the amount of international trade due to heightened prices, damaging relationships that the US desperately needed to keep. (Smoot-Hawley Tariff Act, 2025) Another aspect that this administration has looked over is how other countries respond to tariffs. As stated by the Tax Foundation, if you put tariffs on a country, they will likely put tariffs on you to protect themselves and their industries. When two countries place tariffs on each other, it creates a situation where companies and citizens in both countries must pay more for goods and services, meaning that reciprocal tariffs are bad for each country. This led to less money going into the economy and a decreased consumer income, raising prices to the point where putting food on the table was a constant struggle for millions.


A major part of the administration’s reasoning for the tariffs argument though is that tariffs were great for the country in the late 1800’s to the early 1900’s. According to the president himself, “we were at our richest from 1870 to 1913. That’s when we were a tariff country. And then they went to an income tax concept.” (Trump has touted Gilded Age-style tariffs - An era which saw industrial growth together with poverty., 2025)  The president is a big fan of protectionism, which is when you protect domestic industries from outside competitors, using methods like tariffs and subsidies to boost and restrict certain producers. However, in the 1870’s-1910’s, we did not rely nearly as much on imports as we do now, and the value of our exports was a fraction of what it is now.


United States total imports, total exports and balance of international payments from 1790 to 1970
United States total imports, total exports and balance of international payments from 1790 to 1970

This is because of a principle called isolationism that we had as a country back then, which in practice makes countries want to be independent and produce what they need themselves. This meant that we could impose tariffs on other country with very little to lose: it served as a convenient revenue generator for the United States. However, now with globalization, large scale tariffs dismantle global trade networks that we need to keep intact for the sake of the American economy.

Bias & The Case for Tariffs

There is a solid argument that people use to justify these tariffs though: generating revenue. According to the Tax Foundation, the tariffs will make ~$158.4 billion in revenue this year and next year ~$207 billion. That is a lot of money, which can be used to fund tariff dividends, where the administration made a proposal to give ~$2,000 on average to each American citizen. Trump commented on his intentions with the tariff dividends: “We’re going to issue a dividend to our middle-income people and lower-income people of about $2,000. And we’re going to use the remaining tariffs to lower our debt.” This is lifechanging money for millions, especially those who are living paycheck to paycheck. However, the math does not add up for the tariff dividends. Tax Foundation reported that the cost of trade dividends is estimated to be between $279.8 billion and $606.8 billion, meaning that the tariff dividends are creating a net economic loss for the federal government. With the other negative aspects of tariffs along with this flashy policy not being effective, tariffs are not an economic strategy that is worth using. 


Tariffs in Society

Recent tariffs have caused many problems economically and for our trading relationships. It has forced the United States into a position where we are constantly losing money while increasing prices for goods and services. Unlike other economic tools like domestic taxes, tariffs are not necessary to maintain our economy. The tariffs have indirectly made life more expensive for everyday citizens while also not solving the economic issues Americans care about: solving the debt crisis and lowering prices. However, the tariffs do not look like they will be stopping anytime soon, which creates a multitude of possibilities. Will the administration’s tariffs work and pay off in the end, or will everyday citizens end up worse off due to his tariffs? That will take time to figure out.



References:


BBC Visual Journalism team. (2025, April 11). Trump tariffs list: See all the tariffs by country. BBC. https://www.bbc.com/news/articles/c5ypxnnyg7jo

Duignan, B. (2019). Smoot-Hawley Tariff Act | History, effects, & facts. In Encyclopedia Britannica. https://www.britannica.com/topic/Smoot-Hawley-Tariff-Act



Farmers for Free Trade. (n.d.). Statement on tariff rollback on fertilizers [Image]. https://farmersforfreetrade.com/news/statement-on-tariff-rollback-on-fertilizers


Farm Policy News (Illinois). (2025, March). Poll shows waning farmer support for Trump tariffs [Image]. https://farmpolicynews.illinois.edu/2025/03/poll-shows-waning-farmer-support-for-trump-tariffs/


Fox Business. (n.d.). Retailers shift supply chains to reduce risks from Trump’s tariffs (China). https://www.foxbusiness.com/economy/retailers-shift-supply-chains-reduce-risks-from-trumps-tariffs-china


How Tariffs May Reshape Global Trade and Supply Chains | Supply Chain and Logistics Institute. (2025, February 19). Gatech.edu. https://www.scl.gatech.edu/news/how-tariffs-may-reshape-global-trade-and-supply-chains


Irwin, D. A. (2020). Trade policy in American economic history. Annual Review of Economics, 12(1). https://doi.org/10.1146/annurev-economics-070119-024409

Maurer, M. (2025, May 30). Deere’s plans for offsetting $500 million in tariff costs. The Wall Street Journal. https://www.wsj.com/articles/deeres-plans-for-offsetting-500-million-in-tariff-costs-79ae52d8


McCance, M. (2025, March 11). Supply chains explained: How they work and why tariffs can strain them – Darden Report Online. Darden Report Online. https://news.darden.virginia.edu/2025/03/11/supply-chains-explained-how-they-work-and-why-tariffs-can-strain-them/


PBS NewsHour. (n.d.). Trump floats tariff dividends for Americans — But experts question the math. https://www.pbs.org/newshour/show/trump-floats-tariff-dividends-for-americans-but-experts-question-the-math


Silverberg, D. (2025, July 6). How tariffs are shifting global supply chains. BBC. https://www.bbc.com/news/articles/c93l6n32ne5o




The White House. (2025, April 2). Fact sheet: President Donald J. Trump declares national emergency to increase our competitive edge, protect our sovereignty, and strengthen our national and economic security. https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-declares-national-emergency-to-increase-our-competitive-edge-protect-our-sovereignty-and-strengthen-our-national-and-economic-security/

U.S. Chamber of Commerce. (n.d.). American workers, businesses, consumers and trade tariffs. https://www.uschamber.com/small-business/american-workers-businesses-consumers-trade-tariffs


Yahoo! Finance. (n.d.). Trump tariff wars leave U.S. [Image]. https://finance.yahoo.com/news/trump-tariff-wars-leave-us-110012860.html


York, E., & Durante, A. (2025, August 22). Tracking the economic impact of the Trump tariffs. Tax Foundation. https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/


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