A local economics professor is weighing in on what sweeping tariffs President Donald Trump imposed Thursday on virtually all of America’s trade partners could mean for the economy – and consumers. Stocks plunged around the globe in response to the new tariffs.
Dr. David Mitchell, an economics professor at Missouri State University, said there are positives – stocks falling means it’s a good time to buy for those who are young and wanting to have a nest egg for retirement. But those who are retired or planning to retire soon might want to check with their financial advisor. They will likely see losses.
As for the impact on prices at the store?
“Well, in the short term you're looking at price increases, he said, and lower incomes for people, possibly job losses, which is why the stock market's falling so much."
Mitchell said the probability of a recession has increased significantly because costs are likely to go up.
"I was hearing news stories today of people going into Walmart and, like, trying to fill up their grocery carts with as many things as they could possibly think of, you know, almost in a panic buying kind of thing," he said. "So I think consumers are expecting higher prices. I think they're going to say to themselves, 'you know, I'm going to pull back on some of my discretionary spending. I got to have money for rent and utilities and food and water and gas and things of that nature.' So I do think you're going to see some pullback. You've got retaliatory tariffs now coming on our products, which might mean that there's less demand for the products that we make here and sell to other countries, which, of course, means your jobs and lower incomes for us here too. So I don't know that the probability is 100%, but I think the probability has increased significantly."
Mitchell points out that those who will suffer the most from rising prices are low-income consumers. He encourages people to make sure they have an emergency fund in case they face lay-offs.
Even if the president reverses course and removes the latest tariffs, there will still be fallouts. That’s because of the uncertainty Trump’s decisions have created.
"This on again, off again, on again, off again is actually, it's actually the worst of both worlds, right? The the best thing to do is to have no tariffs, and to a degree, I mean, Trump is correct. You know, Canada does have import tariffs on our goods that we want to sell in Canada. I mean, that is a legitimate concern. He is correct about that," Mitchell said, "but having these tariffs here and then they're gone in two weeks and then they're back and then they're gone in another four weeks or whatever. That actually is the worst of all of the worlds."
Trump has repeatedly said that short term pain is needed for long term gain. Mitchell said those tariffs would have to be in place for several decades for the U.S. to see more manufacturing come back to the U.S. And he points out the climate in this country isn’t right for growing things like coffee beans. Even if they could be grown in greenhouses in Missouri, he said, the cost consumers would pay for coffee would be sky high.
A highly integrated, global system of trade makes everyone better off, according to Mitchell.
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