The maxi skirt is back! Although it sounds strange, in the past the increasing popularity of the maxi skirt has been an indicator of economic downturn, a theory that has now been coined the “Hemline Index”. This suddenly trending piece of clothing does however match current global economic trends, specifically in the U.S, bringing about the question of what is causing this? The answer would be tariffs.
Tariffs can be defined as taxes placed on imported goods, in the form of either a percent of the items total value or a fixed fee cost per unit of goods, often used as a negotiation tool. Companies that are importing foreign goods into the country are required to pay tax to the government for bringing in the material.
Considering the purpose, depending on the context tariffs can be used to protect domestic industries, create more revenue for the government and act as a political negotiation tactic. Recently, Donald Trump imposed a minimum of 10% tariff on all imports from the U.S. which vary depending on the country. For instance, Trump has set a 145% tariff on China who quickly retaliated with a 125% tariff on U.S products, effectively launching a tariff war between two of the largest economies in the world. The U.S. president’s decision has sparked world wide debate on the impact of tariffs, and what the response to this should be.
Taking into account the reasoning behind this controversial choice, Trump implemented these taxes as a reciprocal. For years countless countries placed taxes on American goods, worsening the country’s debt. In response to this long-term money vacuum, the tariffs are an attempt to re-establish fairness in the global financial system, to set up a more sustainable model. Essentially their justification is if the US is providing security and open markets to other countries, those countries should in return provide America with the same benefits out of fairness. America cannot afford to continue buying from other countries while their own exports are so heavily taxed, significantly reducing consumerism.
Through setting tariffs on importing foreign goods, there are potential benefits to American companies, reduction to America’s $36.6 trillion dollar debt, and raising employment rate. By making it difficult for American companies to source their products and materials from foreign countries, such as China and Canada, it forces them to turn towards sourcing products domestically.
Additionally, because the import tax is significantly higher going from 2.5% in 2025 to 19% in 2025, pricing of goods has inflated for American consumers. Since foreign products have been made more expensive, American made goods become a more affordable option for the majority of the population meaning more Americans will buy more locally made goods, benefiting the U.S. economy. According to Trump, many countries are moving towards no-tariff zones such as America, which could in turn open more job availability.
This import tax goes directly to the government, giving them more funding and reducing the country’s massive debt. In response to the tariffs, many countries want to negotiate with the U.S, setting the preconditions for trade deals.
Although potential benefits certainly exist, negative impacts are currently very prominent throughout the world. Countless American companies outsource their materials such as Target, Nike, and Apple because getting materials from foreign countries was previously cheaper than sourcing domestically. With the implementation of tariffs and each country’s respective retaliation, getting materials and products from other countries is a challenge hence countless big companies that have run this system are losing revenue.
Since Trump’s tariff announcement, Apple itself has lost over $640 billion dollars, clearly showing how this development is negatively impacting American companies. Increasing prices of imported materials for production consequently raises the cost of products themselves, causing rapid inflation making many Americans unhappy with Trump’s tariff plan.
All in all, this abrupt implementation has had serious impacts and has become an incredibly controversial discussion across the globe. Although America’s viewpoint of aspiring to restore equilibrium and fairness to global trade markets to reduce their debt, the method of implementation could certainly be interpreted as sudden drastic measures that shocked most of the world. Now that implications of tariffs on America have been covered, what about the impact of these actions on America’s largest trading partners such as China?