On April 2, U.S. President Donald Trump made good on a promise to issue blanket tariffs on all imports into the country and Troy University’s Manley H. Johnson Professor of Economics Dr. John Dove spoke to The Messenger about what that could mean for the economy. 

Dove is a Michigan native who holds a bachelor’s degree from Hillsdale College, master’s from Central Michigan and PhD from West Virginia University. He’s been a professor at Troy University for 12 years and his primary research interest is public enemies, U.S. economic history and political economy. His research also reaches into development economics and state and local public finance. Dove explained that a tariff is simply a tax on imports.

“So, any time that consumers or businesses in the U.S. purchase a good or service that is produced abroad – in another country – that is called an import and when we import those goods if we have a tariff on it, then we ultimately pay an additional tax on those goods and services that we import,” Dove explained. “Tariffs are taxes that no matter what, are going to impact all individual consumers, and really any business, that is going to import any sort of goods or services that they need.”

Dove said that small business are some of the biggest that are impacted by tariffs.

“A lot of small businesses, not just in our area or our state but around the country, rely on sourcing many of their products and goods from abroad,” he said. “What this ultimately means for businesses in the U.S. is that the goods they buy from abroad, it increases the price on the goods that we ultimately pay. 

“Those goods and services will ultimately become more expensive, that tends to reduce our disposable income.”

Dove said that a tariff can be considered a regressive tax. 

“It’s a tax that actually negatively impacts relatively poor individuals much more so than relatively wealthy individuals,” Dove emphasized. 

A positive that Dove said tariffs could help with would be reducing the country’s debt but it would only be a small dent in that debt and would cause more harm than not. 

“The largest argument for a tariff is that it does raise government revenue. The current estimations from the (Trump) Administration suggests these tariffs will raise about $600 billion in revenue,” he continued. “The U.S. does have a large debt and runs a pretty significant deficit. These are funds that could be used potentially to reduce that debt or those deficits. On the flip side, $600 billion is roughly one month of federal government spending.

“What that means is we’re going to impose a lot of economic harm – and a lot of economic problems – on a lot of regular folks, consumers and small businesses in order to raise what ultimately is just a drop in the bucket.” 

Dove said that there are no signs that these tariffs could be short term either.

“It’s hard to say whether these tariffs will persist but early indications suggest the Trump Administration is very serious about maintaining them,” he said. “There’s no indication that there’s any desire to negotiate with other countries around the world.” 

A longterm affect that could impact America is retaliatory tariffs, Dove said.

“The biggest longterm issue we’re going to see is this is going to cause many countries affected by these tariffs to impose their own retaliatory tariffs against the U.S.,” said Dove. “When that happens, when we trigger a ‘trade war,’ ultimately no one wins. Consumers end up worse off, they have fewer products available to them, the ones they do have tend to be inferior in quality or more expensive and business costs rise, which makes the U.S. less competitive to other countries. 

“Ultimately, this comes down to a trust issue, too. It’s very difficult now to take the U.S. at its word and consider the U.S. credible by other countries. That will be some of the more major longterm ramifications.”