Economics expert says Trump tariffs could have billions of dollars impact on NJ economy

Rutgers Economics Professor Tom Prusa says it will take some time to understand the full impacts.

Tom Krosnowski

Jan 31, 2025, 10:42 PM

Updated 9 days ago

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The White House on Friday announced that tariffs against Canada, China and Mexico will take effect on Saturday.
Economic experts say that products, from new cars to avocados and alcohol, may see price hikes if the tariffs alter trade patterns. Those three nations – according to the United States Census Bureau – were the country’s top three trading partners in November.
The White House says there will be 25% tariffs imposed on goods from Mexico and Canada, and 10% tariffs on those from China. President Donald Trump says he hopes that charging American companies that import from these countries will reduce their trade and increase domestic production.
Press Secretary Karoline Leavitt says there’s an additional reason for the tariffs on China.
“For the illegal fentanyl that they have sourced and been allowed to distribute into our country which has killed tens of millions of Americans. These are promises made and promises kept,” she said.
But economists warn this could hurt consumers. Rutgers Economics Professor Tom Prusa says it will take some time to understand the full impacts, but given New Jersey’s significant port economy, tariffs come at a price.
He says there’s already been increased port activity in the weeks ahead of these expected tariffs.
“New Jersey imports almost $9 billion of goods from Canada, and we import almost $3 billion from Mexico. We export similar amounts. A 25% tariff - at least what we saw in the previous round, which mostly fell on China - we’re talking billions of dollars in impact on the New Jersey economy,” Prusa said.
Prusa warns that the goods that we’re used to are a product of global trade.
“We have blueberries almost year-round now, and that's almost entirely due in the early season in Mexico and later in the season from Canada,” he said. “We're not simply reliant on New Jersey.”
Even the threat of tariffs can stir things up - coffee prices rose from market uncertainty after the U.S. threatened a similar tariff on Colombia earlier in the week. The impacted nations could also respond with their own tariffs on U.S. goods.
“The idea that this is really going to be a win-win for the United States, there is literally no academic support for that at all,” Prusa said.