In a Rose Garden speech Wednesday, President Donald Trump announced sweeping new tariffs on nearly all goods imported into the U.S.
The tariffs will begin at a baseline of 10%, but many countries with relatively large trade deficits will see higher rates due to reciprocal tariffs, which will tax their imports to the U.S. at roughly half the rate of their own tariffs on U.S. goods.
The orders also begin a 25% tariff on foreign-made automobiles imported to the U.S.
"This is one of the most important days, in my opinion, in American history," President Trump said. "For years, hardworking American citizens were forced to sit on the sidelines as other nations got rich and powerful, much of it at our expense. But now it's our turn to prosper, and in so doing use trillions and trillions of dollars to reduce taxes and pay down our national debt."
During his comments, President Trump said a tax deduction may be enacted for Americans who buy a car built in the U.S.
But the president said he "couldn't care less" if foreign automakers increase their prices in response to the new tariffs.
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The White House says the tariffs will raise hundreds of billions of dollars and spark more companies to produce their goods domestically.
But many economists say consumers will pay the price — including economics professor Keith Maskus.
"In the end, it is pretty much always the domestic consumers that pay almost the full share these tariffs. And again, it's just the way tariffs work," Maskus said.
That could mean higher prices for cars, groceries, housing and other goods impacted by the tariffs.
And those who can afford them the least may feel the pinch the most.
"The share of consumption that low-income households pay for tariffs is much, much higher than it is for middle-income or higher wealthier consumers," Maskus said.
Farmers are expected to bear the brunt of these trade tensions. According to the American Farm Bureau Federation, Canada and China were the second and third-largest destinations for U.S. agricultural products in 2024.
Retaliatory tariffs could decrease demand for U.S. goods, impacting production and farmers' bottom lines and increasing prices in stores.
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Small business owners shared many of those concerns on Wednesday in interviews with Scripps News.
"The only way we can really respond is take an even bigger hit on our margins, which have already been decimated due to inflation and COVID; B, lower the quality of our products, which is not something we want to do; or C, have to increase prices," said Alfred Mai, founder of ASM Games, a card game manufacturer. "None of these are things we want or want to do. But at some point, these tariffs have to go somewhere."
"I think looking at trade imbalance is a really important issue, but not on the backs of small businesses," said Sarah Wells, the founder and CEO of Sarah Wells Bags, a Virginia-based small businesses that makes handbags and apparel. "In fact I think we really need to think of businesses as not a monolith. Small businesses just don't have the cash and resources for unpredictable international tariffs."
Markets sank in after-hours trading following President Trump's announcements, which came after trading had closed for the day.
An ETF that tracks the S&P 500 dropped more than 2.3% and the ETF that tracks the NASDAQ 100 also dropped about 3.1%.
