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Oklahoma economist: Broad tariffs will cost ‘everybody’

By : Kathryn McNutt//The Journal Record//March 5, 2025//

Vice President JD Vance, center, and Speaker of the House Mike Johnson, R-La., left, clap as President Donald Trump arrives Tuesday to address a joint session of Congress at the Capitol in Washington. (Mandel Ngan/Pool Photo via AP)

Vice President JD Vance, center, and Speaker of the House Mike Johnson, R-La., left, clap as President Donald Trump arrives Tuesday to address a joint session of Congress at the Capitol in Washington. (Mandel Ngan/Pool Photo via AP)

Vice President JD Vance, center, and Speaker of the House Mike Johnson, R-La., left, clap as President Donald Trump arrives Tuesday to address a joint session of Congress at the Capitol in Washington. (Mandel Ngan/Pool Photo via AP)

Vice President JD Vance, center, and Speaker of the House Mike Johnson, R-La., left, clap as President Donald Trump arrives Tuesday to address a joint session of Congress at the Capitol in Washington. (Mandel Ngan/Pool Photo via AP)

Oklahoma economist: Broad tariffs will cost ‘everybody’

By : Kathryn McNutt//The Journal Record//March 5, 2025//

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Sweeping being implemented by the are going to be damaging to the , Oklahoma State University economics professor said Wednesday.

“If this is sustained, it’s going to be very costly for everybody,” Rickman said. “Broadly speaking, everybody loses.”

Economists who rarely agree all are forecasting the new tariffs will slow job growth, increase prices and unemployment, and stall interest rate reductions, he said.

Tariffs can be effective if used strategically for one industry, like protecting its dairy industry, but broad-based tariffs against all goods and services will have a negative effect, Rickman said.

“The freer the is between countries, the better off people are in all countries,” he said.

President ‘s 25% taxes against Canada and imports went into effect Tuesday, although Canadian energy products such as oil and electricity are being taxed at a lower 10% rate. The president also doubled the 10% tariff on to 20%.

The taxes triggered retaliatory measures by Canada and China, with Mexico planning to announce its response on Sunday. The three countries are the United States’ three largest trade partners.

“There will be a little disturbance but we’re OK with that. It won’t be much,” Trump said before a joint session of Congress on Tuesday.

After repeatedly insisting no exemptions would be granted, the White House announced Wednesday that Trump is granting a one-month exemption on the new tariffs on imports from Mexico and Canada for U.S. automakers worried the new trade war could crush domestic manufacturing.

The announcement came after Trump spoke with leaders of the “big 3” automakers, Ford, General Motors, and Stellantis.

Asked if 30 days was enough for the auto sector to prepare for the new taxes, White House press secretary Karoline Leavitt said: “He told them that they should get on it, start investing, start moving, shift production here to the United States of America where they will pay no tariff.”

On April 2, Trump plans to announce what he calls “reciprocal” tariffs to match the tariffs, taxes and subsidies provided by other countries. That could dramatically increase the tariff rates charged globally.

Rickman said consumers could see higher prices as early as this weekend on fruits and vegetables imported from Mexico, while cost hikes on items like steel and aluminum will take longer to work through the supply chain.

Tariffs imposed during Trump’s first administration largely were paid for by consumers, Rickman said. Producers don’t necessarily pass through the entire cost to consumers. They may find ways to offset the cost by efficiencies or purchasing from other sources, he said.

China is stepping up plans to move manufacturing to Cambodia and Vietnam and ship U.S. import from those countries to avoid tariffs, Rickman said.

He said that Oklahoma’s energy sector could see both benefits and negative effects.

The increased cost of importing oil from Canada might allow domestic producers to raise their prices, but it could harm producers of liquefied natural gas who export to Canada if Canada imposes retaliatory taxes, Rickman said. Many Oklahoma companies produce both oil and LNG.

“LNG exports had been looking good. It’s been a bright spot,” but now European countries that buy a lot are worried about potential future tariffs, he said.

When it comes to reduction of the federal workforce, Oklahoma City could be hit harder than many places, Rickman said. He said that Federal workers make up 4.5% of the city’s workforce compared to the national average of less than 2%.

Tinker Air Force Base is the largest single-site employer in Oklahoma, with more than 27,000 military and civilian employees.

Ben Johnston, chief operating officer at small business lender Kapitus, said tariffs on the import of foreign goods could make manufacturing in the U.S. more economically relative over time, which could be good for some industries.

“But in the short to medium term, these tariffs are likely to drive inflation significantly higher and cause significant disruption to the global supply chain, threatening many U.S. jobs at manufacturers, wholesalers and retailers who rely on the global supply chain to source the components, raw materials, and finished products they sell,” Johnston said.

U.S. businesses that import critical goods from abroad should determine if it is possible to source these goods domestically or produce them themselves. If that’s not possible, business owners will need to pay close attention to the tariffs being levied and which countries they are impacted most, he said.

“In the long run, higher tariffs may help protect the viability of certain U.S. manufacturers and could incent greater investment in U.S. manufacturing,” Johnston said. “While this would be a positive for some sectors of the economy, the impact of tariffs is difficult to predict as retaliatory tariffs on U.S. exports from impacted nations will reduce demand for goods produced in the U.S. and sold abroad.”

The Associated Press contributed to this article.