MINNEAPOLIS — President Donald Trump announced a sharp reversal in his administration’s trade policy on Wednesday, halting new tariffs for most countries while dramatically increasing duties on Chinese imports to 125%, effective immediately.
The announcement comes after several days of volatility on Wall Street as markets responded to uncertainty about the administration’s trade strategy.
According to White House officials, more than 75 countries have approached the federal government about trade talks but have not responded “meaningfully” to previous US tariff threats.
The unpredictable trade environment is causing anxiety among both consumers and business owners.
“I can’t go to the grocery store without spending $50,” said Ellie Lagorio, a Minnesota resident concerned about rising food prices. “I am just scared. What if something happens and people lose their jobs, including me?”
Economic experts share these concerns. Andrea Raffo, senior vice president at the Federal Reserve Bank of Minneapolis, highlighted the challenges that businesses face in uncertain times.
“It is difficult to figure out if the tariff will be 10% or 20% in six months,” Raffo told the newspaper. “It’s an environment that is making business planning a little bit more complicated.”
Small business owners are already experiencing the effects of trade tensions. Molly Blanski, who has owned Statement Boutique in Minneapolis’ North Loop for 13 years, collaborates with over 25 Minnesota businesses.
“Some of my vendors say the tariffs could cause them to increase their prices anywhere from 5 to 40 percent,” Blanski told me. “They use global sources as well. For example, one of my vendors uses a clay machine and recently discovered that they are no longer shipping to the United States due to tariffs.
Blanski is concerned about consumer spending during periods of economic uncertainty. “If they’re worried about inflation and possibly losing their job tomorrow, will they go out and buy a bunch of clothes and jewelry? Perhaps not.
The tariff situation has raised concerns about the broader economic implications. JPMorgan CEO Jamie Dimon told NBC News on Wednesday morning that if fully implemented, tariffs are likely to cause a recession.
If more widespread tariffs are reinstated after a three-month hiatus, Blanski hopes Minnesotans will continue to support local businesses.
“We’re not here to just support our business,” she told me. “We are here to support the 25-plus local artists we carry.”
Economists will be watching closely to see how markets react to the temporary pause in tariff implementation. The administration has stated that trade talks will continue during this time, but has not specified what conditions must be met to keep tariffs from being reimposed.
The 125 percent tariff on Chinese goods marks a significant escalation in the ongoing trade war between the world’s two largest economies. Chinese officials have yet to announce retaliatory measures.