Following a week of economic uncertainty, President Donald Trump’s message to the country was simple – “sometimes you have to take medicine to fix something.”
Proposed to spark a manufacturing boom in the United States, President Donald Trump’s tariff agenda has been hotly contested by economists since the idea was first presented, and the frequent adjustments made by the administration have led to confusion among taxpayers and industry leaders alike.
The uncertainty surrounding the policy alone could upend the economy of Delaware and the nation as a whole, many experts contend, and alter global trade alliances.
Some of Delaware’s biggest trade partners have been hit the hardest by Trump’s tariff policies, and the consequences are still largely unknown as the President continues to waver on a long-term plan.
On April 3, Donald Trump imposed a baseline of 10% tariffs on all imports, with higher rates placed on specific countries like China, Japan, and members of the European Union, among others, in what the president dubbed ‘’Liberation Day.’’
China announced that beginning April 10, that country would impose retaliatory 34% tariffs on all American products, which led Trump to impose a total 104% tariff, furthering the trade war between two of the most powerful global economies.
Additional tariff rates also were placed on countries that imposed “retaliatory” tariffs, but those were rescinded for every country except for China later on April 9.
China and the United States have since been engaging in an escalating trade war, each racking up the tariff rate on the other in rapid succession. As of April 14, Beijing increased its tariff rate on U.S. imports to 125% in response to Trump hiking duties on Chinese goods to 145%.
A tariff is a tax on imported goods, usually measured as a percentage of the product’s value, and paid by the importing company. Tariffs, like all taxes, increase the cost of the product that it is placed upon – and that cost is usually passed on to the consumer.
“Tariffs are what we call a regressive tax,” said Jim Butkiewicz, economics professor at the University of Delaware. “A regressive tax means that as a percentage of their income, low income households will pay more than high income households.”
Tariffs typically are used by governments looking to protect certain domestic industries or negotiate trade agreements.
Trump has touted tariffs as a way to bring manufacturing jobs back to the United States, while at the same time seems willing to negotiate with countries about their tariff rates – a strategy that economists believe sends mixed messages.
“This is not going to succeed at reviving U.S. manufacturing,” said Michael Strain, director of economic policy studies at American Enterprise Institute, a conservative think tank, said to USA TODAY.
On April 9, Trump rolled back his retaliatory tariff policies – holding countries to just the baseline 10% tax – for all countries except for China.
After Trump’s April 9 announcements, the global financial markets fell into a state of chaotic uncertainty.
Chicago Board Options Exchange’s Volatility Index, often dubbed the ‘’fear index,” reached a three-week high.
Companies with a large presence in Delaware such as DuPont de Nemours and Agilent Technologies saw a 52-week low in its stock price in the days following the tariff announcement.
Bank stocks including Bank of America and JPMorgan Chase also were hit particularly hard by the tariff announcement.
AstraZeneca shares also hit a 52-week low this week after Trump announced that tariffs would be placed on pharmaceutical products beginning April 9.
“It’s very uncertain,” said Butkiewicz. “Nobody knows which companies are going to be affected the most. We may end up having very different tariff rates a week from now. It’s not a well-conceived plan.”
According to the Observatory of Economic Complexity, a global trade database, Delaware imported $14.8 billion worth of goods through 2024.
The most imported goods were crude petroleum oil ($3.27 billion), photosensitive devices and assembled photovoltaic modules and panels ($555 million), adrenal cortical hormones ($536 million), bananas ($369 million) and lead-acid electric batteries for vehicles ($348 million).
Most of Delaware’s imports come from Canada, China, South Korea, France and Venezuela.
In 2024, Delaware exported $4.71 billion worth of goods. The top exports were packaged medicaments ($392 million), chemical analysis instruments ($319 million), aircraft parts ($285 million), centrifuges ($185 million) and refined petroleum ($157 million).
Data for December 2024 showed that Delaware mostly exported its goods to the United Arab Emirates, Canada, China, Mexico and Japan.
Mexico and Canada are subject to the 25% tariffs already placed on the country for products like steel and aluminum.
Economists and investors have long warned about the dangers of imposing broad tariffs, stating that the chance for recession is much higher due to escalating trade tensions.
Carla Stone, president of the World Trade Center Delaware, spoke from the Global Forum for World Trade Center Associations in France about the impact that tariffs could have on the global economy and trade.
Industries that are dependent on imported goods such as food, lumber, fabricated metals, components used in the production of electronics, medical equipment and pharmaceuticals will be particularly impacted by the imposed tariffs.
Reports already have shown that construction likely will become more expensive nationwide, and Delaware is no exception.
“With less construction, the real estate brokerage and other supporting services may be affected as fewer structures and homes are built because of greater material costs,” Stone said.
While the Trump administration has focused mainly on taxing goods coming into the United States, the impact the tariffs will have on economic services are relatively ambiguous
“While some industries are not direct importers, such as the educational, legal and financial sectors, many families may be unwilling to send their children to the U.S. for university or to vacation here due to the uncertainty and instability that this trade conflict engenders,” Stone said.
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And it’s not just importers that will be impacted by the impending trade war.
“Let’s not forget the exporters in this,” Stone said. “Uncertainty makes businesses reluctant … Exporters are going to get hit just as much, if not more.”
In Delaware, this could mean major consequences for the agriculture sector. According to the Office of the United States Trade Representative, small and medium-sized firms generated 19.5 percent of Delaware’s total exports of goods in 2022.
“Other countries will look to punish us by looking at things that we export,” said Butkiewicz. “We’re a big exporter of a lot of agricultural products because we’re such an efficient producer so that will be attacked.”
Countries already are beginning to retaliate on the United States, which will impact industries that rely on exports as well.
The country also has retaliated directly against Delaware companies, launching anti-monopoly investigations into DuPont’s Chinese operations and banning shipments from Millsboro’s Mountaire Farms facility.
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“The longer [tariff policies] stay in place, the more things will change permanently,” Butkiewicz said. “That will be to our country’s detriment.”
Molly McVety covers community and environmental issues around Delaware. Contact her at mmcvety@delawareonline.com. Follow her on Twitter @mollymcvety.
What to know about tariffs, and how may they impact Delaware's economy? – The News Journal
