Trump's 'Liberation Day' tariffs: Here are 5 things to know

Responding to President Donald Trump's declaration of 10% baseline tariffs on all imports Wednesday, Long Island economist Juan Carlos Conesa said, "It's worse than I thought."

Ahead of the announcement Wednesday, dubbed "Liberation Day," Conesa  said the implementation of widespread tariffs would have major consequences for local businesses involved in international trade. One local trade expert, though, said the tariffs were more balanced than expected. 

Trump said Wednesday the tariffs, including a higher tax on dozens of nations that run trade surpluses with the United States, will produce hundreds of billions in annual revenue and bring factory jobs to the United States, though Wall Street and many economists worry about potential recession.

Last week, Trump announced a 25% tariff on imported cars and car parts.

“Tariffs are a gamble that could hurt our economy and drive up costs for American families," New York State Comptroller Thomas P. DiNapoli said in a statement Monday. 

DiNapoli said because the New York City metro region, which includes Long Island, is “one of the country’s largest importers and exporters of goods,” the impact in the region will be acute.

"It is consumers who will likely be on the hook for increased costs,” DiNapoli said.

Here are five things to know about "Liberation Day" tariffs.

How will consumers likely be impacted?

Local economists said the use of tariffs in such a broad way will increase prices on a wide, yet unknown number of consumer goods.

“It certainly sounds like the plan is to liberate consumers from a lot of their money from their wallets,” Stephanie Kelton, professor of economics and public policy at Stony Brook University, said Monday. “Prices are going up.”

Which products could be affected by the new tariffs?

Kelton had said, from what was known so far, that the tariffs would cover imported products like produce, electronics, toys, syrup, beer, liquor and much more.

“It’s just about everything that is imported,” she said.

Specific products that Trump is tariffing, like autos, will be exempt from his new tariffs.

Why are tariffs going into effect?

While local economists said Trump's trade war appears erratic, some trade professionals see potential for an upside.

"The goal is not to collect tariffs,” said Thomas Cook, managing director of Blue Tiger International, an East Moriches supply chain and trade consultancy. Cook said tariffs are the "weapon" Trump is using to force concessions on import duties levied by other countries on U.S. exports.

Trump has argued that other countries impose far higher trade barriers on U.S. exports than the U.S. government charges on imports.

"Most of this is just saber rattling with the exception of China," he said. "There will be short-term pain. ... But, if Trump is right, there will be significant long-term benefits to the country."

How could the tariffs affect Long Island business owners?

As early as November, Cook said he's been advising local clients to stockpile shipments in advance of this year’s tariffs.

A lot of business owners who didn’t prepare are in a panic, Cook said earlier this week.

“I’ve had senior-level business executives crying to me on the phone about how upset they are,” he said.

Cook said Wednesday that he found Trump's declaration of 10% base tariffs "more balanced, but 20% on the EU will have a very negative impact on European and American companies."

Local economists foresee limited business activity as the effects of tariffs wind their way through the economy.

“These are serious policies that have huge consequences for most people that are somehow impacted by international trade, which is a huge portion of firms,” said Conesa, economics professor at Stony Brook. 

What steps can businesses and consumers take to prepare for the new tariffs?

Cook said there aren't any good ways for customers to respond to price hikes from tariffs, but there are a number of options for businesses that didn’t stockpile imports before the tariffs.

“They can move their purchases that come in over the next few weeks into bonded warehouses or foreign trade zones because they sit out of the U.S. trade zone and hold it there while importers wait it out,” he said.

Cook said because importers don't pay tariffs until items in a bonded warehouse are released, they can delay tariff payments, potentially avoiding costs if trade policy changes back quickly. 

With wires