President Donald Trump has implemented heavy tariffs on goods coming from three of America’s biggest trading partners since taking office: Mexico, Canada and China. In his most recent efforts, Trump imposed 25% tariffs on all steel and aluminum imported into the United States, escalating a global trade war.
Tariffs are taxes placed on imported goods, which often lead to increased production costs for businesses. These additional expenses are generally passed onto consumers through higher prices.
Among those likely to be affected by the tariffs are small business owners, raising concerns among USC students like Lily Moayedi.
Moayedi is a USC junior majoring in communications and founder of the clothing brand Dread The Thread, which specializes in denim skirts. She said the tariffs pose serious challenges to her small business, which she promotes and sells through e-commerce platforms and college campuses.
While Moayedi collaborates with a Los Angeles-based manufacturing company, her production occurs in Turkey and China, putting her company at risk for higher import costs.
“If I continue manufacturing outside the United States, I will likely need to raise prices to sustain my business and maintain profitability,” she said in a written statement. “This is a challenging decision, because my goal with ‘Dread The Thread’ is to create fun, affordable clothing, particularly for my target demographic of young adults.”
The already 20% tariff on imported Chinese goods is likely to stay in place, which economists have said will cause businesses to struggle with the weight of increased costs.
“Tariffs targeted at a specific country may actually backfire and harm American companies if the American company relies on inputs from that country,” said Matthew Hill, a USC economics professor.
But, Hill said he remained skeptical about statements from the Trump administration arguing that the tariffs would be beneficial for the U.S.
“Tariffs would be inflationary and dampen growth,” Hill said. “If the tariffs start to do real economic damage, I expect Trump to back off from them.”
While the long-term effects of the trade policy remain uncertain, economists have warned that the tariffs could hinder economic growth and impact the lives of every American.
“It’s the uncertainty that is causing a drag on a company’s decision whether to invest in equipment or invest in additional jobs,” said Brian Peck, an international relations and policy professor at the USC Gould School of Law.
Peck also mentioned that Southern California businesses specifically were experiencing “anxiety and angst caused by the uncertainty of whether the tariffs are going to go into effect or not.”
Peck said the tariffs would likely also result in the U.S. “alienating our close allies,” while also having the potential to increase prices for consumers.
“[Trump supporters] voted for him to protect or to improve the economy and reduce inflation, and these tariffs will have the opposite effect,” he said.