Tariffs Impact School and Local Governments

The United States began imposing tariffs on imports of steel and aluminum products from all countries except Australia and also on a large share of U.S. imports from China, starting in March 2018. Those countries all retaliated in kind. Because of these taxes on imported goods – in particular those imposed on China — U.S. consumers have faced an increase in the prices of everyday goods like cellphones, computers, baby products, household appliances, farming equipment, building supplies, etc. and are likely to see further cost increases in the near future.

The negative impact of the U.S.-imposed tariffs will be felt throughout the U.S. economy.

According to Estimated Impacts of Tariffs on the U.S. Economy and Workers, “Tariffs reduce the dollar value of U.S. GDP by 0.37percent…The average America[n] family of four will have to find an extra $767 to pay for higher costs for goods and services resulting from the tariffs.” But it’s not just individuals who will be adversely affected by tariffs; schools and local governments will also face cost increases. According to information outlined in the “Announced Tariffs and Quotas” table, any organization dependent on important services and goods such as construction, wholesale and retail trade, transportation, finance, insurance, communications, business and professional services, personal and recreational services, and other services (e.g. utilities, education, health, government, etc.) will feel the weight of tariffs.

For example, as this article titled “When Tariffs Impact Schools” highlights, steel tariffs have brought school infrastructure repairs to a halt, creating yet another “obstacle that educators need to conquer while educating students who are facing a myriad of challenges.” School districts also report financial concerns about updating outdated PA, security and computer systems. Similarly to schools, local governments are large consumers of electronic goods like phone and computer systems, HVAC systems, security cameras and appliances, etc. Vendors are all raising their costs in order to offset the tariffs.

In brief, tariffs raise prices by 10-25% and reduce economic growth. Schools and local governments will certainly feel the pressure of this additional expenditure as vendors raise their prices on parts, materials, and services.