According to the executive order, the tariffs are intended to pressure these countries into stopping the flow of migrants and the deadly drug fentanyl across U.S. borders. The Mexican and Canadian governments offered concessions to shore up their borders with the U.S., while China responded by imposing retaliatory tariffs and stating it would open an antitrust investigation against Google.

It remains to be seen if the Canadian and Mexican tariffs will take effect as planned. While 25% tariffs would not be the highest in American history, they would impact nearly 5% of our total GDP, which is historically unprecedented. Together with the 10% tariff on China, the affected goods encompass a wide array of necessities, including housing, fuel, cars, and food.

So, how would these tariffs impact the cost of living for Americans? Fordham economist Giacomo Santangelo offered his insight. 

Fordham Now: Do tariffs raise prices for consumers? 

Giacomo Santangelo: When businesses face elevated import costs, they typically pass these increases to consumers through increased prices for goods and services. 

This phenomenon has been observed in every sector on which tariffs have been placed, including electronics, automobiles, and everyday consumer products, since time immemorial. The recent tariffs proposed by the Trump administration are anticipated to follow this trend, potentially resulting in significant increases in the cost of living for American consumers, as stated by President Trump this past weekend.

FN: To put it in perspective, how significant are the proposed 25% tariffs on Mexican and Canadian goods? Is that pretty steep? 

GS: The introduction of a 25% tariff on goods imported from Mexico and Canada would have substantial implications. Such a considerable tariff would disrupt supply chains, especially in industries with heavy reliance on cross-border trade, such as automotive and manufacturing. The economic impact is likely to be felt across all three economies, with potential retaliatory measures further complicating the situation.

FN: Could the negative impacts of tariffs be offset by their benefits, like a better job market, in your opinion? 

GS: While the U.S. manufacturing sector may experience some perceived short-term gains in employment due to increased competitiveness of domestic production, the long-term benefits remain uncertain. 

Many of the Mexican and Canadian goods taxed do not have U.S. counterparts to replace them. Also, elevated production costs resulting from tariffs on imported inputs generally overshadow these temporary gains. In short, the U.S. consumers will end up paying more of a cost than U.S. industries will benefit.

FN: What do you make of the argument that the tariffs Trump imposed during his first term did not lead to drastic inflation and therefore we shouldn’t worry this time? 

GS: The tariffs under Trump’s first term were not as inflationary as these proposed tariffs because they were more limited in scope.

The current tariffs are broader and more substantial, targeting a wider range of goods and potentially having a more pronounced impact on prices. Furthermore, the economic context has evolved, with the U.S. emerging from a period of high inflation, resulting in heightened sensitivity to increases in the cost of living. Therefore, caution is warranted regarding the potential inflationary effects of these new tariffs, especially given the president’s recent comments that tariffs on the EU are forthcoming.

“I’m grateful that they gave me a shot to come here,” said Bernard Anderson, a mixer at Greyston. “[When I] came here,” Anderson said, “I stopped going to jail.”

He and other employees who have flourished at Greyston tell its story in a documentary recently co-produced by Gabelli School of Business professor Michael Pirson, Ph.D. It’s the latest outgrowth of research by him and his colleagues about how businesses can succeed by tuning in to their employees’ humanity.

Addressing the Great Resignation

Key to this approach is promoting employees’ dignity, according to an Oct. 30 Harvard Business Review article co-authored by Pirson, Gabelli School professor Ayse Yemiscigil, Ph.D., and Donna Hicks, Ph.D., an associate at Harvard’s Weatherhead Center for International Affairs.

The article describes how to lead an organization with dignity—by defining it clearly, recognizing people’s inherent value, and acknowledging dignity violations, among other things. The goal is creating workspaces “where people feel seen and heard, and where they can collaborate at the next level” because of it, said Pirson, the James A. F. Stoner Endowed Chair in Global Sustainability at the Gabelli School.

Yemiscigil said it’s an urgent topic because of the so-called Great Resignation and “the epidemic of low employee engagement.”

“There are all sorts of indicators showing that the way that we manage and lead organizations is not working for the majority of people,” she said.

Creating a dignity culture, Pirson and Yemiscigil said, involves such things as listening to understand people, acknowledging employees as whole human beings, and giving employees a greater voice in the organization. “It doesn’t take long” for this culture to take hold if there’s enough intention and commitment, Pirson said.

Inspired by Sesame Street

Helping companies make this shift is the idea behind the documentaries Pirson started co-producing about four years ago after he happened to meet some of the (human) cast members of Sesame Street through a Gabelli School connection. Inspired by the show’s emphasis on human potential, he set out to feature companies that exemplify humanistic management, working with co-producer Alison Bartlett, a writer, director, and Emmy-nominated actress who was a Sesame Street cast member.

His second short film, Zen Brownie, focuses on Greyston Bakery, a supplier of Ben & Jerry’s founded in 1982 by Bernie Glassman, a physicist and Buddhist monk. (One of Glassman’s friends, Oscar-winning actor Jeff Bridges, narrates.) The bakery’s dignity-based open hiring policy creates “a virtuous cycle of trustworthiness,” Pirson says in the film. “Trust that you place in other people typically gets trust back” and often inspires the recipient to want to live up to that, he says.

Studying Student Behavior

His team has shown the documentaries at film festivals; they’re looking for a distributor and planning a few more films. He and Yemiscigil are also working on studies, soon to be submitted to the Journal of Business Ethics, that show how dignity can boost employees’ motivation and engagement as well as teams’ performance. Some of their findings come from a study of 800 Gabelli School students preparing for a consulting competition, working in teams.

Dignity is important not only for companies but for society because it frees us to think more about large-scale problems, Pirson said, giving climate change as an example.

Without “dignity wounds” occupying our minds, he said, “we move from a defensiveness into a space of abundance where we can create, and that is what’s necessary for our species to actually survive.”

That’s according to a study co-authored by Fordham economics professor Sophie Mitra, Ph.D., and researchers in health-related fields at other universities. It shows that after four decades in which inflation stayed low and didn’t pose a serious problem in America, the mental health impacts of its spike in the past few years are ripe for study, Mitra said.

“That’s an open field in terms of research,” she said. “We know … that unemployment has very detrimental effects on mental health, and that a job loss can lead to depression and other negative mental health outcomes.” Inflation has received less study, but seems to be “a very important potential determinant of well-being, including mental health,” she said.

The study also suggests that positive economic news, like a low unemployment rate, may be “insufficient in terms of telling us about how people feel about the economy,” she said.

The High Price of Milk

The study, based on data about 71,000 working-age adults, was published earlier this year in the International Journal of Environmental Research and Public Health. The researchers used information from the U.S. Census Bureau’s Household Pulse Survey, begun during the coronavirus pandemic, which collects data about how households are affected by various social and economic issues.

Their study focused on respondents who told the Census Bureau about their stress level caused by price increases. It compared these stress levels in mid-September 2022, when the inflation rate was 8.2%, with levels in June 2023, when inflation had dropped to the closer-to-normal rate of 3%. Despite the decline, the share of respondents who were very or moderately stressed by inflation increased, going from 77% to 79%.

The increase, Mitra said, suggests that a short-term measurement like the inflation rate might not reflect the cumulative stress caused by rising prices. People’s belt-tightening measures can include canceling subscriptions, cutting back on utilities, delaying medical treatments, and working additional jobs, the study notes.

And even if the inflation rate drops, prices are still “a lot higher than what they were a couple of years ago,” she said. “The price of a gallon of milk is not what it used to be in 2020.”

Impact of Job Losses, Long COVID

Mitra also noted that stress due to inflation is worse for those whose income is cut, whether from a job loss or a case of long COVID-19. Among other findings, the study found stress levels increased more among certain groups, including less educated adults and women in general, for instance.

The study calls for policies to address “the complexity of stress responses” stemming from societal challenges like the pandemic and the inflation that followed it—a combination of problems seen “never before in the history of the U.S.,” the study says. The study also points to the need for adding inflation adjustments to government benefits and tax credits—such as the child tax credit—that promote people’s economic security, Mitra said.

She looks forward to future studies with her cross-disciplinary group, which includes researchers from the social work school at Rutgers, the Penn State Cancer Institute, the University of North Texas Health Science Center, West Virginia University’s department of dental public health, and JPS Health Network in Fort Worth. “We share an interest [in]the relation between economic insecurity and health,” she said.