Tariffs' True Toll: Businesses Face Billions in Costs

Money Explainers

Unmasking the real cost of import taxes. How tariffs hit American companies. The volatile landscape of global commerce. #TariffImpact #TradeUncertainty #USBusinessCosts

Transcript

00:00President Trump's tariff policies, often touted as a way to make foreign manufacturers pay,

00:06are in fact imposing billions of dollars in direct costs on U.S. businesses.

00:11A new analysis by the JPMORGAN Chase Institute reveals that American employers,

00:18specifically those with annual revenues between $10 million and $1 billion,

00:23face a direct cost of $82.3 billion from the current tariff plans.

00:28This significant sum, the analysis notes, will likely be managed through price hikes, layoffs, hiring freezes, or reduced profit margins.

00:37This finding directly contradicts the administration's claims that foreign entities absorb the tariff costs.

00:45These mid-sized companies, which employ roughly a third of the private sector U.S. workforce,

00:51are particularly reliant on imports from China, India, and Thailand.

00:55The retail and wholesale sectors are especially vulnerable, while overall inflation has yet to skyrocket.

01:03Larger corporations like Amazon and Walmart have strategically built up inventories to delay the reckoning.

01:10The JPMORGAN Chase Institute's report comes ahead of a crucial July 9 deadline,

01:15when President Trump is expected to finalize tariff rates on goods from dozens of countries.

01:20While a 90-day negotiating period saw most imports facing a 10% baseline tariff.

01:27China, Mexico, and Canada face even higher rates, alongside separate 50% tariffs on steel and aluminum,

01:35should the initial April 2 tariffs have remained in place.

01:39These businesses would have faced staggering $187.6 billion in additional direct costs.

01:47Even at current rates, the $82.3 billion equates to an average of $2,080 per employee,

01:55or 3.1% of the average annual payroll, encompassing firms that do and don't matter.

02:03The outlook for tariffs remains highly uncertain, with a pattern of on-again, off-again negotiations.

02:09While some domestic manufacturers might benefit from reduced foreign competition,

02:15wholesalers and retailers operating on already slim profit margins

02:20will likely be forced to pass these tariff costs on to consumers.

02:25Treasury Secretary Scott Besant has praised the administration's trade deals as unprecedented.

02:31But the economic impact of these tariffs continues to be a complex and evolving story.

02:36Money expires a lot of money.

02:38Money expires a lot of money.

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