EAU CLAIRE, Wis. (WEAU) – Economics professor and department chair at UW-Eau Claire, Dr. Thomas Kemp explained what people can expect to see after President Trump’s recent announcement on incoming tariffs.
The biggest tax will be 100% for pharmaceutical drugs, 50% on kitchen cabinets and bathroom vanities, 30% on upholstered furniture and 25% on heavy trucks starting on Oct. 1.
The President said he hopes the tariffs will help reduce the government’s budget deficit while attempting to increase domestic manufacturing.
If these taxes stick Dr. Kemp said “if you are a domestic producer of one or more of those items you mentioned, then you may see some benefit from this because essentially your competition is being ‘hamstrung’ for a lack of a better word.”
He added that consumers are not likely to benefit from these new tariffs as prices can gradually increase over time when buying imported goods. However, there can also be a long-term benefit should domestic production increase.
“I suspect, I’m more optimistic that we’ll see a reshoring of pharmaceutical production than I was of manufacturing when we were talking about it some months back. The real challenge with this tariff is likely to be similar to the previous ones, is that it’s creating a lot of business uncertainty,” Dr. Kemp said.
That uncertainty can also mean less job opportunities to try and manage inflation possibilities. However President Trump said foreign-made heavy trucks and parts are hurting domestic producers that need to be defended.