Economic effects of new tariffs and policies

The recently imposed tariffs on China, as well as the ones on hold for Canada and Mexico, present a new set of economic effects that will directly impact Americans. Additionally, the new policies, such as those focused on immigration, will affect our economy.

As of Feb. 4, 2025, there will be a 25% tariff placed on goods from Canada and Mexico. President Donald Trump also confirmed this weekend that there will be a 10% tariff placed on Chinese goods.

Canada’s Prime Minister Justin Trudeau responded to these with a counter-tariff and has caused speculation as to the implications of these new tariffs. President Trump has suggested these tariffs could be applied to the European Union.

Jim Rounds, President and CEO of Rounds Consulting Group, joined “Arizona Horizon” to talk about the impact these tariffs could have.

Impact of trade wars

“Like we discussed before, when economics works best, it works best when government doesn’t interfere like this,” said Rounds.

In this case, when there is a trade war, you’re not punishing the people in another country; you’re punishing the people in your own country, said Rounds.

“You are taxing the companies improving the goods, and in the economic environment today, we are paying 85, 90% of the tariff increase. That’s not good,” said Rounds.

Rounds talked about how the U.S. still has housing affordability issues. There are a lot of reasons this isn’t the right time to play the “political games,” said Rounds. Coming at a time when prices are still high, inflation is moderate, but until inflation gets to subzero, we are paying fairly high prices. 

“There are also arguments that I’m seeing where you sometimes have to play these political games; you have to pick your fight at the right time,” said Rounds.