Increase in tariffs could mean an increase in prices

LEXINGTON, Ky. (ABC 36 NEWS NOW) — President Donald Trump announcing a pause on tariffs on Mexico for one month, but experts are still concerned tariffs on other countires could cause an increase in prices for everyday items.

“As other countries have to pay higher tariffs to import into the U.S., they may retaliate,” Dr. Mike Clark with the University of Kentucky’s Center for Business and Economic Research said.

After President Trump announced a tariff on goods coming in from China, Mexico and Canada, they reacted quickly with retaliatory tariffs.

Dr. Clark says these tariffs could affect nearly everyone.

“Those higher tariffs are likely to get passed on to consumers in the form of higher prices,” he said.

From grocery stores that purchase produce from Mexico, to auto-manufacturers who purchase parts from China, these tariffs are expected to change the way companies operate and ultimately sell their products.

“As those tariffs are applied, that makes those parts more expensive, so it’ll actually increase the cost of things we produce here,” Dr. Clark said. “That can actually hurt those businesses that are now going to see a higher production cost simply due to the tariffs.”

A lot of businesses rely on their counterparts in other countries.

“Trade between countries is actually good, it helps countries really focus on the things they’re typically good at producing,” Dr. Clark said.

He says it’s just a matter of time before people see how these tariffs affect how much more we may have to pay for everyday items.