New Trump Tariffs And PA: What Products Could Cost More Locally?

Pennsylvania leaders are reacting after President Donald Trump this week announced sweeping new tariffs, including a 10 percent tax on imports from all countries and higher tariff rates on dozens more.

Trump, in an announcement Wednesday, said the "reciprocal tariffs" are aimed to promote domestic manufacturing and narrow the gap with the tariffs the White House says other countries unfairly impose on American-made products.

However, many economists warn the action could mean Pennsylvania consumers can expect to pay more for many necessities, such as food, clothing, and energy. And those impacts will be felt most severely by lower-income Americans, a new analysis from the Yale Budget Lab suggests.

The reciprocal tariffs, which range from 10 percent to 46 percent, are set to take effect April 9. The average tariff rate the United States charges would increase to roughly 22 percent from 2.5 percent in 2024, according to Olu Sonola, head of U.S. economic research at Fitch Ratings. That’s the highest tariff rate since 1909.

CNBC has a full list of reciprocal tariffs, including the tariffs other countries charge the United States. If they take effect, U.S. businesses are likely to pass the increased costs onto consumers, sparking fears of a recession or “stagflation,” a combination of high inflation, stagnant economic growth and high unemployment.

Pennsylvania Leaders React

Several Pennsylvania lawmakers, from the Governor to those in Congress, reacted to the news of the tariffs.

Democratic Congressman Brendan Boyle, who represents the 2nd District, took to X to criticize the tariffs, calling the move "the single largest tax increase in American history."

However, Republican Guy Reschenthaler, an ardent Trump supporter who represents Pennsylvania's 14th District, said via X: "I fully support President Trump's critical efforts to right this generational wrong, bring manufacturing jobs home, and rejuvenate American working families."

Pennsylvania Gov. Josh Shapiro did not share Reschenthaler's sentiment. During a visit to a Lehigh Valley brewery, the governor blasted the new tariffs, calling it a new tax on residents and businesses.

"The new federal tariffs going into effect today are a tax on our businesses and our consumers that will drive up costs for everyone — they’ll even make beer more expensive," Shapiro said.

Shapiro's office noted the Trump Administration’s 25 percent tariffs on steel and aluminum are already raising costs for small businesses, forcing businesses to absorb higher production costs or pass them on to consumers.

“Obviously, there are some real concerns right now about the economy, the future, and specifically these tariffs, which are a major issue for small businesses like mine. It’s a big unknown how they’ll impact us — we have ingredients that come from Canada and other sources that could see price increases overnight," said Jeff Fegley, owner of Fegley’s Brew Works, the site of Shapiro's visit.

What Costs Would Increase?

The Yale Budget Lab study suggests lower-income Americans would take the biggest hit because they spend a greater share of their income.

Specifically, households with an average disposable income of around $43,000, among the lowest in the country, would see their disposable income drop by 2.3 percent with the new tariffs and by 4 percent with all 2025 tariffs included, the Yale study said.

The research suggests that the tariffs could have a devastating impact on many in the lowest income brackets. In Pennsylvania, the median household income of $76,081 as of the latest census data available is lower than the rest of the country ($78,538). The per capita income in the Keystone State is $43,104, with 12 percent of residents in poverty.

The wealthiest Americans — those with $500,000 or more disposable income — would see a decline in disposable income of 0.9 on the new tariffs and 1.6 percent overall, according to the study.

The previously announced tariffs impose 25 percent taxes on auto imports, levies against China, Canada and Mexico and expanded trade penalties on steel and aluminum. Trump has also imposed tariffs on countries that import oil from Venezuela and he plans separate import taxes on pharmaceutical drugs, lumber, copper and computer chips.

The Yale researchers said clothing prices could increase by 8 percent as a result of Wednesday’s tariffs, and 17 percent from all U.S. tariffs.

Food prices are also disproportionately affected by the tariffs and would increase another 1.6 percent, which is roughly equivalent to the last 12 months of inflation on grocery prices, the researchers said. Grocery prices are expected to go up 2.8 percent overall from all 2025 tariff actions, with fresh produce up 4 percent overall.

Wednesday’s tariffs leave motor vehicle prices largely untouched, but they are up about 8.4 percent due to the earlier tariffs, resulting in an average increase of $4,000 in the sticker price of new cars, according to the study.

What Happens Next?

Trump bypassed Congress by declaring a national emergency, which isn’t reviewable by courts. But Congress can terminate it. Four Republicans — Sens. Lisa Murkowski of Alaska, Susan Collins of Maine, and Rand Paul and former GOP leader Mitch McConnell, both of Kentucky — have joined Democrats in trying to undo the tariffs.

Paul, independent Sen. Angus King of Maine, and five Democrats led by Sen. Tim Kaine of Virginia are co-sponsors of the one-sentence resolution that terminates. the emergency declaration.

Wall Street Reacts

Financial markets around the world are reeling Thursday following Trump’s latest and most severe volley of tariffs, and the U.S. stock market may be taking the worst of it.

In early trading Thursday, the S&P 500 was down 3.3 percent in early trading, worse than the drops for other major stock markets. The Dow Jones Industrial Average was down 1,160 points, or 2.7 percent, as of 9:32 a.m. Eastern time, and the Nasdaq composite was 4.5 percent lower.

Little was spared as fear flared globally about the potentially toxic mix of higher inflation and weakening economic growth that tariffs can create. Prices fell for everything from crude oil to Big Tech stocks to small companies that invest only in U.S. real estate. Even gold, which has hit records recently as investors sought something safer to own, pulled lower. The value of the U.S. dollar also slid against other currencies, including the euro and Canadian dollar.

If Trump follows through on his tariffs, stock prices may need to fall much more than 10 percent from their all-time high in order to reflect the global recession that could follow, along with the hit to profits that U.S. companies could take because of them.

“Markets may actually be underreacting, especially if these rates turn out to be final, given the potential knock-on effects to global consumption and trade,” Sean Sun, portfolio manager at Thornburg Investment Management, told The Associated Press.

He sees Trump’s announcement on Wednesday as more of an opening move than an endpoint for policy.

The Associated Press contributed reporting.