President Donald Trump has implemented a series of tariffs, including reciprocal tariffs on countries worldwide involved in international trade. Dr. Phillip Magness, an economic historian and senior research fellow at the Independent Institute, believes that these tariffs are a “terrible move” for the country.
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“Trump’s tariff policies do not appear to have a coherent objective in mind,” Magness told GOBankingRates. “He simultaneously claims they are for revenue, for protecting strategic industries and a negotiating bluff, but each of these goals is at odds with the other two.
“In practice, Trump has now given us tariffs that do not accomplish any of these objectives, although they have initiated an unprovoked trade war with Canada and Mexico — two closely allied trading partners of the United States,” he continued. “Such policies can only be described as reckless.”
Here’s why Magness believes the tariffs being levied by the Trump administration will negatively impact your wallet and the wider economy.
Quick Take: Keeping Track of Trump’s Tariffs
Global trade deals keep getting more complicated when it comes to imported goods. The implementation and impact of Trump’s tariffs have had a lot of back and forth in 2025. The trade agreements with countries, including Japan, and throughout the European Union have become uncertain and imports from Canada and Mexico have specifically been targeted by the White House.
All the ups and downs have been hard to navigate, but here are some key takeaways from where Trump’s tariffs currently stand:
- The current baseline reciprocal tariff rate is 10%, but Trump has recently announced plans to raise it to 15 to 20% yet this threat has yet to be realized.
- Tariffs on Chinese goods were raised from 104% to 145% in April 2025, marking the highest rate so far this year
- Tariffs targeting goods from Canada, China and Mexico linked to fentanyl production remain in effect, despite a court challenge. President Trump has threatened to impose International Emergency Economic Powers Act (IEEPA) tariffs on Canada, Mexico and China related to fentanyl; national security tariffs on autos, auto parts, steel and aluminum from all countries; and IEEPA tariffs on all countries related to an economic national emergency at a baseline rate of 10% with scheduled increases for more than 50 trading partners later in 2025.
- Trump has implemented reciprocal tariffs aimed at equalizing trade relationships that will be in effect as of August 1, 2025.
- These tariffs vary by country, and below are a few examples:
- Japan, Korea, Malaysia, Tunisia: 25%
- South Africa, Bosnia and Herzegovina: 30%
- Bangladesh, Serbia: 35%
- Cambodia, Thailand: 36%
- Laos, Myanmar: 40%
Here are two ways Trump’s tariffs could impact your finances in both the short term and long term from an economic historian’s perspective.
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Higher Prices on Cars, Appliances and Many Other Consumer Goods
Higher tariffs mean higher prices, and nowhere will you feel that financial impact more than behind the wheel. The tariffs on steel and aluminum alone will drastically increase the cost of auto parts. Many of the products you purchase are likely to get more expensive as a result of Trump’s tariffs, Magness said.
“The new steel and aluminum tariffs will pass through onto consumers in the form of higher prices on almost any product that uses either steel or aluminum as an input,” he said. “Since tariffs are taxes, they raise prices through either the revenue assessed against the import or by diverting purchases to higher-priced domestic producers.
“In either scenario, this higher price on inputs gets passed through as higher prices on the finished product,” Magness continued. “That means automobiles, appliances and hundreds of other everyday consumer goods will now cost more due to tariffs.”
An Erratic Stock Market
Tariffs have caused rapid market swings, which could negatively impact investors.
“In addition to the deadweight economic losses caused by higher prices, Trump’s tariff policies have already provoked retaliation from abroad against American-produced goods. The erratic nature of his implementation has also wreaked havoc on the stock market by creating uncertainty over threats that American firms will soon be facing higher prices on key inputs such as steel and aluminum, or uncertainty about supply chains with key trading partners like Canada and Mexico,” Magness said.
“Every time Trump tweets about a new tariff, the markets nosedive in response.”
Caitlyn Moorhead contributed to the reporting for this article.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: I’m an Economist: 2 Ways Trump’s Tariffs Could Hit Your Finances Hard
