Tariffs have been the talk of the ag industry now that we’re less than seven weeks away from President Trump returning to the White House. However, Ball State economist Dr. Michael Hicks shared with Hoosier Ag Today his bleak outlook on Trump’s tariff proposals.
“[Tariffs are] not making ourselves better off, we’re making ourselves worse off, says Hicks, who serves as Director of the Center for Business and Economic Research at Ball State University. He is also the George and Frances Ball distinguished professor of economics at Ball State.
Hicks says he expects Trump’s talk of tariffs to become reality.
“It’s hard to know exactly what [Trump] is going to do, but we know what he did when he was in office last time,” says Hicks. “He raised tariffs on manufactured goods from China, and that pushed the Midwest into recession—as a combination of the tariff increase on consumer prices and the reduction for demand of manufactured goods, combined with a pretty solid retaliatory tariff placed on agricultural products that are exported from Indiana, Michigan, Ohio, and elsewhere.”
He says that Trump’s tariffs will simply be embedded into the costs of the items we buy coming in from outside the U.S.
“Just so people know—a 10 percent tariff on all imports is going to raise the average family’s cost about $1,000 per family over the next year. [Tariffs of] 20 percent would be about $2,000. That doesn’t count the 60 percent on China, which would raise it another $300, so we’re talking about—just from his campaign rhetoric—about a $2,300 per family tax increase from tariffs. That’s before the retaliatory tariffs,” he says.
Hicks says that retaliatory tariffs will likely hit our farmers the hardest.
“Retaliations are going to hit corn, soybeans, and pork that are exported from the United States—either in commodity form or processed form—to China, Mexico, and Canada,” says Hicks.
“Indiana exports about $2.6 billion worth of soybeans, $1.3 billion worth of corn, and almost $500 million worth of pork each year,” according to Hicks. “Those are going to be subject to tariffs and they’re going to cause other countries to look for those products elsewhere.”
Hicks believes that Trump’s trade policies will ultimately send our economy back into a recession.
“It’ll take 6 to 18 months for the full effect to be felt, so I think the earlier we understand the effect of this, the better able will be to judge President Trump’s trade policies and economic policies before the next election,” says Hicks.
CLICK BELOW to hear Hoosier Ag Today’s news report.
CLICK BELOW to hear C.J. Miller’s full conversation with Dr. Michael Hicks, who expresses his concerns over President Trump’s tariffs and the impact it could have on farmers and rural Hoosiers.
