A new wave of tariffs imposed by President Donald Trump will officially go into effect at midnight, raising costs on a range of imported goods.
All eyes will be on how much of the burden ultimately falls on consumers' wallets.
Saturday’s (Feb. 1) move is expected to have ripple effects on consumer prices and supply chains for electronics, cars, and household goods.
The tariffs are part of Trump’s broader trade policy, which he says is designed to level the playing field and reduce America’s trade deficit.
The business between the United States and its neighbors totaled $1.8 trillion in 2023.
Critics argue the tariffs could backfire by fueling inflation and straining relations with key trading partners.
Leaders in Canada and Mexico say they are “Ready to respond” if the tariffs take effect.
--> Trump says he’ll place tariffs on Canada, Mexico and China on Saturday
On Friday evening, Kimberly Gill spoke with Dewey Steffen, the chief investment officer with Great Lakes Wealth in Northville.
He helped Local 4 understand how this will all work.
Kimberly Gill: “Will tariffs lead to higher prices for consumers?”
Dewey Steffen: “Absolutely, that’s an easy answer because, with a 25% increase in goods coming from Mexico as well as Canada as well as 10% in China, that means - so very simple answer, absolutely.”
Kimberly Gill: “How might these proposed tariffs affect Detroit’s auto industry?”
Dewey Steffen: “Well, component and part of cars are made in Mexico, so instatntly, those components will cost more as they come in. You will see higher prices of cars, absolutely.”
Trump mentioned that tariffs would be imposed on pharmaceuticals, steel, aluminum, and computer chips, along with oil and other natural resources down the road.
That said, consumers could expect to pay more for electronics and groceries, and Steffen said everything would be on the table.
“Everything will be on the table, absolutely. So with tariffs, that’s a tax, but it also will be coming inflationary, meaning higher prices, and that can absolutely be across the board.”
When asked if tariffs could save jobs and raise tax revenue because that’s what the Trump administration essentially said would happen, Steffen said absolutely on the tax revenue.
“Absolutely on the tax revenue. That’s the whole point of the tariffs, which is to increase the tariff or the tax coming in, so that’s revenue for us. And as it relates to jobs, American jobs, absolutely because the whole idea is to make American goods and services on par with those imported goods, so you would think that yes, they’ll be more made in the USA coming out.”
Kimberly Gill: “What would the long-term economic impact be for Detroit if these tariffs are carried out long-term?”
Dewey Steffen: “Well, the plan, as said by Washington and the White House, is that it is going to be beneficial, and it would help America as that also stands to help Detroit if we can sell more American cars, that’s more beneficial to the Detroit worker.”
Americans are worried that they’re unable to buy groceries like milk and eggs, as well as bread and other staples, due to the high cost.
To think that prices could be rising even more is bringing fear to families nationwide.
Steffen suggests consumers pay attention.
“We’d say pay attention, but now is not the time to panic. So, just take your time, pay attention, and we’ll see what happens,” Steffen said.
