2 weeks Ago
On the campaign trail and since taking office, President Donald Trump promised to lower prices and foster economic growth through the aggressive imposition of tariffs on many of the nation’s most important trading partners.Economists overwhelmingly reject that premise, arguing that tariffs are a tax on American consumers and businesses. A trade war, which harsh tariffs are likely to spur, would accelerate inflation and slow economic growth, possibly tipping the U.
S. into a recession and inflicting tremendous harm on the residents, businesses and economy of Hampton Roads.On Wednesday, in what the White House called “Liberation Day,” the president set his plan in motion.
Trump announced the introduction of 10% across-the-board tariffs and higher levies for goods imported from China, Japan, Europe and a host of other countries.Markets already jittery over Trump’s unpredictable economic policies, including announcements of tariffs that the president subsequently delayed or canceled, panicked in the days after. The Dow Jones, Nasdaq and S&P 500 plummeted, liquidating trillions in value and raising the prospect of a global financial crisis.
But it’s not investors who will be feeling the effects of this self-inflicted wound. American consumers who grumbled at persistent inflation under President Joe Biden will pay for the president’s actions as prices on cars, coffee, agriculture products and electronics are all set to rise as the cost of tariffs are passed on to buyers.When the White House says these actions will generate $6 trillion in their first year, it really means Americans will be paying an additional $6 trillion as a result of the president’s trade policies.
The actual number may be higher, though consumers are likely to cut back on spending in response to rising prices.For Hampton Roads, and Virginia, the tariffs represent a direct threat to our regional and state economies. Hampton Roads has for years leaned heavily on the “three pillars” of defense spending, hospitality and tourism, and trade through the Port of Virginia.
After a slight decline in traffic in 2023, the port rebounded in 2024 and affirmed its status as a key center for commerce on the East Coast.A William & Mary study of 2021 data found the port is responsible for “565,000 jobs, $63 billion in Virginia gross state product, and $124.1 billion in output sales.
” And while operations endured during the pandemic at a time of supply chain disruptions around the world, Trump’s economic arson could turn that to ashes.As the Office of the U.S.
Trade Representative reports, Virginia exported $21.8 billion of goods to the world last year, commerce that contributes to 87,000 jobs in the commonwealth. Under the heading “Virginia Depends on World Markets,” the office notes that 15% of the commonwealth’s total goods exports, worth $3.
4 billion, go to Canada, with China ($1.5 billion), India ($1.4 billion), Mexico ($1.
3 billion), and Germany ($1.1 billion) rounding out the top five.Researchers at Old Dominion University’s Dragas Center for Economic Policy and Analysis warned in January that “Virginia is vulnerable to significant changes in tariff, immigration, and federal spending and employment policies.
” They also predicted that, “The imposition of 10% (or 25%) tariffs would lift inflation above 4% in 2025 and invite retaliatory tariffs, lowering employment and real GDP growth.”Sign up for Viewpoints, an opinion newsletterIt’s not only consumers who will feel the sting, but producers across Virginia. Agriculture and forestry exports will slow.
Construction materials will be in short supply. And uncertainty infecting the economy will make businesses wary of expansion and could hit the brakes on hiring. If there is a bright spot in this, it’s that the president’s ability to impose tariffs hinges on his invocation of emergency authority — something Congress should challenge.
This week the Senate approved a resolution introduced by Virginia Sen. Tim Kaine to end an emergency order that allowed Trump to impose tariffs on Canada; another bipartisan bill would require congressional approval of new tariffs under the constitutional provision that gives the legislature, not the executive, power to impose taxes.Because that’s what this is: the largest tax increase in nearly 100 years.
And it’s Americans who are paying the price..
