When President Donald Trump announced a wave of reciprocal tariffs on global trading partners during his “Liberation Day” event on April 2, the American economy shuddered.

Businesses across the country, from local mom-and-pop shops to multinational conglomerates, are now scrambling to adapt to a new, uncertain future under the Trump tariff regime.

Tariffs are a tax levied on goods entering the country that is paid by the importing business, typically calculated as a percentage of the overall value of the item.

For example, a $1,000 smartphone would incur a $100 duty that must be paid before it is allowed into the domestic market, assuming the exporting nation is under a 10% tariff rate.

These tariffs were implemented to “strengthen the international economic position of the United States and protect American workers,” according to a release from the White House, and included a base 10% tariff rate on all foreign nations with additional rates imposed on countries with large trade deficits with the U.S.

After a series of tit-for-tat retaliatory rate increases with China and a volatile reaction from the stock market, Trump announced a 90-day pause on all reciprocal tariffs on all countries excluding China on April 9, while the universal 10% rate will remain in place with few exceptions while new deals are negotiated.

Local reactions

While rates have remained stable for a little over a week, business leaders in central Pennsylvania are uneasy, waiting to see if the current tariff levels are truly here to stay.

ABCD Corp. President/CEO Steve McKnight said, in reference to the new tariffs, that “any added expense to business is never a good thing,” as these costs are likely to get passed on to the end consumer.

McKnight said he has heard from local businesses that source components from overseas that the high rates imposed on China will raise the cost of many of their raw materials.

“While long term this may force those businesses to rethink their supply chain and possibly consider onshoring options, they are longer term solutions,” McKnight said. “In the short term, these costs are real and will affect final pricing and potentially demand for certain products.”

Across the region, Cambria Regional Chamber of Commerce President/CEO Amy Bradley said that chamber members are experiencing “a lot of confusion” over the rapid fluctuations in tariff rates.

These members are unsure whether they should be worried or not that worried because the long-term situation with the tariffs seems to be up in the air.

Bradley’s Bedford County counterpart Bette Slayton, president/CEO of the Bedford County Development Association, said that her members are opting for a cautious outlook.

What Slayton has heard from members seems to be a “wait and see” approach, as businesses are unsure whether to invest the considerable time and resources to modify their supply chains to better suit the new tariff conditions that may change over the coming weeks.

“I don’t think anyone is well versed enough to be frightened or supportive or not,” Slayton said.

Vice President of Economic Development Todd Dolbin said that the Chamber of Business and Industry of Centre County is gathering information and working to better understand the full scope of potential effects on the local economy and sharing information to keep its members up to date on the developing situation.

Elected officials across the region are also hearing from their constituents on this issue.

Sen. Dave McCormick held a closed-door meeting with business leaders in State College on Tuesday to hear their concerns about the potential impact on their operations.

McCormick’s office did not respond to multiple requests for comment on this story.

Rep. John Joyce said he has met with constituents from Blair, Bedford, Cambria and Huntingdon counties, and that the impact of tariffs is a frequent topic of discussion.

“The ultimate goal is to return to a robust U.S.-based America-first economy, and since President Trump’s inauguration in January, his policies have already resulted in trillions of dollars of investment into our economy that will directly benefit American workers,” Joyce said in a statement.

Impacting global relationships

According to Professor Terrence Guay, director of the Center for Global Business Studies at Penn State, it is difficult to predict the lasting economic impact of the tariffs, as Trump has changed his mind on the matter several times over the past month and may alter course again.

“I think that’s a problem a lot of businesses are facing — they just don’t know what (the business environment) will look like going forward,” Guay said.

Businesses rely on the stability of foundational economic variables like Federal Reserve policy, currency exchange rates and tariff levels to inform long-term decisions like whether to hire new employees or build new facilities, Guay said.

Revamping a critical supply chain or moving a factory from Canada to the U.S. can be a multi-billion dollar, decade-long undertaking, and are decisions unlikely to be made on a whim.

“So if tariffs are going to be set at a certain rate then removed or reduced, companies can’t work in that kind of situation,” he said.

Trump has repeatedly said that the new tariff rates will level the playing field in international trade and promote growth in domestic jobs by making U.S. manufacturers more competitive in the global market.

“Let’s assume (the tariff levels in place on April 15) stay stable for the next two years, I don’t think it’s going to have much impact on bringing jobs back to the United States,” Guay said.

Many American firms import goods from southeast Asian countries like Cambodia and Vietnam, and unless Trump imposes stiff tariffs on these nations, Guay doesn’t expect this arrangement is likely to change.

Trump has singled out China throughout rounds of reciprocal tariffs in both his first and second terms, saying their allegedly unfair trade practices have cost Americans hundreds of billions each year.

In his April 2 announcement at the White House, Trump said that they had “taken tremendous advantage of us,” imposing an additional tariff of 34% on all Chinese imports that was later increased to a total of 145% after back-and-forth rate hike retaliations saw China impose a 125% tariff on American products.

America and China are the two largest global economies by annual gross domestic product and are inexorably connected by trade.

According to the Congressional Research Service, China is the third-largest source of American imports, with $438.9 billion in goods, and the fourth-largest export market for U.S. products, with $143.5 billion in 2024.

Many everyday products purchased by Americans come from China, Guay said, such as gardening supplies, consumer electronics and childrens’ toys.

“I don’t really see a lot of American companies changing their global production and moving factories back to the United States because they have found other places to locate,” he said.

Guay said that unless tariffs are raised “considerably” and kept there for a long time, companies won’t reconsider these decisions, “And the economic disruption associated with that would be considerable,” he said.

Rising prices

Blair Companies President/CEO Philip Devorris said that while some level of tariffs is necessary to improve the balance of trade with China, the recent escalation is too much, too soon.

“I appreciate the current effort to ensure fair trade between our countries, but I believe the issues are very complex and will require much more than high tariffs to make real improvements,” Devorris said.

Both the economic downturn during the coronavirus pandemic and the recent tariff action will contribute to the reshoring of manufacturing jobs over time, Devorris said, but this process will be a sizable undertaking.

Many industries, like consumer electronics, have complex supply chains that take time to relocate, and any reshoring of manufacturing jobs will necessitate finding and training thousands of new employees in a recruiting environment where companies are already struggling, he said.

Cost increases for American consumers are also on the horizon.

“Prices will rise significantly over the next two to three months as inventories are depleted and new shipments arrive. Even where U.S. businesses have the capacity to produce more product, they are likely to raise prices to near the level of the import tariffs,” Devorris said.

Even though nearly all of Blair Image Elements’ — one of Devorris’ companies that offers a variety of signage — products are manufactured in Altoona, most of the electronic components can only be sourced effectively in China, so their prices will increase due to the heightened tariffs.

James Wistar is the president of Everite Door, a small business that builds residential and garage doors in Everett.

Wistar said that he is “quite nervous” about the future of his company, especially with the uncertainty surrounding the new tariff rates on Canada, which affects about half of his supply of raw cedar, fir and hemlock wood.

Many of his industry competitors have already raised their prices approximately 6% to 10% in response to the tariffs, Wistar said, which Everite will likely have to follow.

According to Wistar, he doesn’t have the luxury of finding alternative suppliers for his lumber, as Canadian mills have more production capacity than their American neighbors.

“There’s no real way to source in the U.S., since the trees are all in Canada. … It’s not really possible,” Wistar said.

Wistar said that while he would like to see more manufacturing in the U.S., the economy will likely decline due to the depressionary impact of the tariffs resulting from a “spooked” market.

“When people are confident, sales go up and people buy more, stable (Federal Reserve) policies means more investment, and when they’re scared they buy less,” he said, “and when there is a lot of fear in the economy, you get a recession.”

Cambria County Farm Bureau President Marty Yahner said that while America follows its trade agreements, other countries do not, and the Trump tariffs are an effort to right that wrong and hold these countries accountable.

“Is this scary? Sure, I’m holding my breath,” Yahner said, “but we have to buckle in and ride the roller coaster with the goal to come out on top in the end as the United States should be.”

Yahner said that the Farm Bureau supports Trump’s goals of secure and fair trade, but hopes he can limit the economic disruption, as farmers and rural communities often bear the burden of tariffs.

These tariffs could also increase costs of essential farm supplies like fertilizer and its key ingredient potash — 80% of which the United States imports from Canada — Yahner said.

According to Yahner, it is important to avoid “tunnel vision” and have faith that the plan will work in bolstering the domestic economy and provide long-term benefits for everyday Americans.

Bedford Reinforced Plastics relies on material from China, according to business development director Tom Wright, and will have to raise prices in some cases to accommodate the tariff hike.

Wright said BRP is currently looking elsewhere in the world to find new suppliers who will not be subject to high tariff rates.

That process will be a “short term pain,” Wright said, but he is still in favor of the tariffs overall.

“We just have to get through a … one- to three-month period; of course the whole thing could go away tomorrow if the Chinese elect to negotiate with the current administration,” Wright said.

After the first round of tariffs on Chinese imports implemented by the Trump administration in 2018, Wright said that BRP didn’t have to find a new supplier and just raised prices to compensate.

“The U.S. market accepted it and life went on, business was good,” he said.

Wright said that his customers understand the necessity of the price increases and that this understanding is shared industry-wide.

“They know our company is not taking advantage of you,” Wright said. “Everyone who uses the material is seeing the exact same thing.”

According to Wright, he understands Trump’s vision for the tariff regime.

“I believe in what he’s doing, it’ll be short-term pain for a long-term gain.”

Mirror Staff Writer Conner Goetz is at 814-946-7535.