On April 2, President Donald Trump declared the date “Liberation Day” and imposed a series of tariffs on U.S. trade partners. The tariffs, presented as a symbol of American economic independence, were calculated based on the trade deficit between the United States and each partner nation.

Following a sudden and dramatic decline in the stock market, Trump placed a 90-day pause on his policy almost immediately, with the exception of China. As of April 14, there is a blanket 10% tariff on every country, 125% tariff rate on China and some product specific exceptions, including a 25% tariff on automobiles, steel and aluminum and no reciprocal tariffs on electronics.

These tariffs are all subject to change.

As confusion spreads across markets and American households, many Colorado State University students are worried about how Trump’s tariff policy will impact their livelihoods and worsen the issues they already face.

“The job market is god-awful — it’s impossible to live anywhere,” political science student Izzy Knaus said. “How are we going to pay for life when it’s hard to get jobs? The economy is crashing. No one can afford housing.”

To understand the full impact, it is important to break down how tariffs work, what the administration aims to achieve and how these changes could reshape everything, from the cost of living to job prospects for graduating seniors.

What we know about tariffs

A tariff is a tax paid to the U.S. government by a domestic company that is importing goods from another country. Matthew Hitt, a political science professor at CSU, described how tariffs would work on his hypothetical business: Matt’s Hats.

“If I’m running a store here in Fort Collins and I want to import hats that were made in Canada, I will pay the tariff to the U.S. government upon the importation of my Canadian hats,” Hitt said. “If I’m paying a 10% tariff, I’ve just lost 10% of my profit. So what I have to do then is raise the price of the good to cover the tariff or go out of business.”

This means that businesses will often raise prices to absorb the costs of these tariffs, which ultimately affects consumers.

Although tariffs are known to raise the price of goods for consumers, they have historically been an effective tool for economic development. Ramaa Vasudevan, an economics professor at CSU, detailed how tariffs have successfully been leveraged in the past in an email interview.

“Tariff barriers have been an integral part of the developmental strategy of developing countries in the decades after the Second World War,” Vasudevan said. “Tariffs can be an effective tool for nurturing industry when they are targeted and backed by other policy measures to promote industrial investment in specific sectors.”

Hitt added that some politicians and economists see tariffs as a way to boost specific industries, but for them to be effective, they often need to be in place long enough to justify changes in manufacturing.

“The most important impact will be on grocery prices. The sticker shock is already being felt here. Cars, even secondhand ones, and bikes will become more expensive.” –Ramaa Vasudevan, CSU economics professor

“If there’s a particular industry that is being genuinely treated quite unfairly, then you tariff that one particular good that’s coming from the country that you think is being unfair to try and remedy just that,” Hitt said. “The tariff has to be in place for a long time with its negative economic impacts (in) the broader economy for that company to think, ‘Yeah, it’s worth it to bring this factory back home.’”

However, Vasudevan also pointed to the historically unsuccessful 1930 Smoot-Hawley Tariff Act — the most sweeping tariff policy in U.S. history — which triggered a wave of retaliatory tariffs and exacerbated the Great Depression. While tariffs have existed for decades, she emphasized that there is no clear precedent for such broad policy in today’s global economy.

“This is the more pertinent historical comparison for the sweeping tariffs being pushed by the present administration,” Vasudevan said. “A key difference is that the world is much more interconnected, and trade is a more integral part of the goods consumed across the world, which are produced through supply chains that crisscross borders. Blanket tariffs are not the right tool for bringing back manufacturing to the U.S. in the present context.”

Unlike the targeted, long-term tariffs used in the past, the Trump administration’s policy represents a much broader and more abrupt intervention in global trade that has yet to be studied.

Deconstructing Trump’s tariff policy

Trump has framed the tariffs as a way to take back economic sovereignty and reverse what he said he believes to be years of Americans being ripped off by its trade partners.

According to a White House press statement, “President Trump refuses to let the United States be taken advantage of and believes that tariffs are necessary to ensure fair trade, protect American workers, and reduce the trade deficit — this is an emergency.”

Experts said the U.S. has had trade deficit with many of its partners for years, but this is not necessarily an emergent sign that America is being taken advantage of.

“America is very prosperous, and so our consumers, our businesses, are able to import a lot of goods from all around the world,” Hitt said. “There are some countries that … simply don’t remotely have the kind of wealth per capita that America has, so how could we possibly expect them to have a trade surplus where they buy more American goods than we buy from them?”

Nonetheless, Trump said the tariffs will increase American manufacturing and present avenues for future negotiations with trade partners. According to Hitt, these motivations are contradictory at best.

“One of the goals is a short-term strategy to encourage more trade again once we think that the trade deal is better, or this is a long-term strategy to incentivize manufacturers to return home,” Hitt said. “They can’t be both at the same time. They can see their short-term strategy or long-term strategy, and it’s unclear which we’re actually pursuing.”

While tariffs have been used in the past as a controversial way to negotiate new trade deals, it is unclear how tariffs would feasibly encourage American manufacturing when they are subject to change via negotiation. The scenario can again be exemplified through the hypothetical business Matt’s Hats.

“If I’m a rational producer of any goods and services and I’m doing it overseas right now, I’ll say, ‘Well, I’m not going to invest millions, billions, of dollars in production in the United States because next month, maybe those tariffs will be gone, and this will be a huge waste of money,’” Hitt said.

According to Vasudevan, companies are likely to explore other avenues before investing in American manufacturing.

“Offshoring was the result of the decisions of U.S. corporations to relocate globally in order to protect and enhance their profit margins,” Vasudevan said. “A much more concerted, coordinated strategy beyond blanket tariffs is needed to entice them back. It is more likely that businesses will try to carve out exemptions and loopholes for the tariffs through deals with the administration.”

Students worry for their future

For now, Trump’s long-term intentions remain unclear, but the effects of his policy are already rippling through everyday life for many students at CSU. With rising costs, an unstable job market and the looming possibility of a recession, students are bracing for even more economic uncertainty in the months ahead.

Vasudevan said students can expect to pay more for most goods, even secondhand.

“The most important impact will be on grocery prices,” Vasudevan said. “The sticker shock is already being felt here. Cars, even secondhand ones, and bikes will become more expensive.”

Knaus said she is worried because students already struggle to afford necessities like housing and food.

“We already have high rates of food insecurity here at CSU, and I think that’s going to go up with higher cost of living, higher just like having to pay more for everything — for gas, for cars, for tech, for food, like, all of that,” Knaus said.

Cole Mcginnes, a CSU business student, said he already has to budget at the grocery store due to high food prices.

“I’m not rolling (in) money,” Mcginnes said. “When I go to the grocery store, I’m comparing prices to save a dollar or two.”

For students who plan to graduate soon, the possibility of a volatile job market is another pressing anxiety. Mcginnes said he recently accepted a sales position, but he is worried the offer might not stay on the table.

“They could rescind that job offer because the economy is not right, and they can’t afford to pay me a base salary, and people aren’t buying from them as much,” Mcginnes said. “It just trickles down to kind of where I’m at, and then I’ll be out of the job basically.”

Vasudevan said layoffs and a tighter job market are very real possibilities for multiple industries, ranging from retail to agriculture.

“While manufacturing jobs may or may not come back, some service sector jobs might also be wiped out,” Vasudevan said. “This is important because services have been the mainstay of employment growth in the recent decades.”

According to Hitt, this could mean many students forego the job market altogether and instead stay in school.

“If the economy tips into recession, that could make the market more competitive,” Hitt said. “There could be fewer places hiring or more people out of work or laid off who are competing for those same jobs. So often, we see in economic recession college students start to think more seriously about postsecondary options.”

Meanwhile, one of the most immediate effects of Trump’s trade policy has played out in the stock market, where investor uncertainty has triggered sharp declines. In the days following the tariff announcements, major indexes dropped and volatility spiked, impacting some student investors and their families at CSU.

“My parents have a lot of money in stock market, and they’ve lost like $500,000,” CSU student Jack Conroy said. “I also lost like $2,000 in mutual funds.”

Like many investors, Conroy said he plans to wait out the market decline and invest in more secure stocks later on.

“I just figured I’ll let it get back maybe to early March levels and start taking it out of some mutual funds, and then maybe use about a quarter of it, put in some other stocks, or maybe something that’s even less volatile, you know, like treasury bond,” Conroy said. “But basically, just waiting for now.”

However, Vasudevan said even traditionally stable investments like U.S. Treasury bonds may no longer be safe.

“A worrying sign, and one that triggered the 90-day pause on the additional punitive tariffs, is the volatility in the market for U.S. treasuries,” Vasudevan said. “These have traditionally been a global safe-haven for global investors — their asset of choice when investors become jittery. This role is coming into question in the present moment. Instead of buying U.S. treasuries, investors are selling these in a dash for cash. It will take another heroic intervention by the U.S. (Federal Reserve), like that during the pandemic, to extricate the financial system from the mess.”

With prices climbing and global markets rattled, many economists warn that a recession could be on the horizon, a possibility that has some CSU students on edge.

“(Recession) takes decades to bounce back from, so that’s obviously the concern is, like, we’re going to have this huge recession,” Knaus said. “I mean, during recessions, people die. That impacts quality of life conditions for everybody.”

A recession, while not guaranteed, is not out of the realm of possibility. As the market becomes increasingly volatile, some economists worry that the conditions for recession are emerging.

“The policies are going to exacerbate inflation as prices of mass consumer goods and consumer durables rises,” Vasudevan said. “This would imply a squeeze on real wages. … In the absence of coordinated policies to support domestic manufacturing growth and reshore production, we are going to see growing joblessness. So the tariffs and the uncertainty around these policies is going to trigger both recession and inflation.”

A hallmark of Trump’s tariff policy has been uncertainty, but this also applies to the question of severe economic downturn. While Vasudevan’s warning about the looming economic strain is stark, she also emphasized the importance of staying informed and engaged, especially during such uncertain times.

“All this might appear overwhelming,” Vasudevan said. “Things are in a state of flux. Hope in times like these lies in being informed; that is what being a college student is about — building community, promoting and participating in rational, evidence-based policy debates and being an engaged citizen.”

Reach Chloe Waskey at news@collegian.com or on social media @CSUCollegian.