The tariff tantrums continued this week as President Trump threatened a 200 percent duty on wine and champagne imported from the European Union. It’s feeling like an episode of Recession Fears: All Stars up in here lately, so even if you’ve reached your limit on how many times you can tolerate hearing the word “tariff,” you should probably keep tabs on how the forthcoming trade war might affect your rainbow wallet in the coming months.
First, a quick primer on what the hell tariffs actually are. Tariffs are basically an import tax placed on goods and machine parts coming into the U.S. from other countries, and they’ve been around since 1789 (when America invented them, which is so on brand for this country). They’re also kinda confusing, which makes them great fodder for the misdirection and mudslinging that sums up so much of today’s politics.
Tariffs are used to negotiate with other countries and convince American manufacturers to build their supply chains within our borders, which theoretically leads to more jobs. But in the short term, they often jack up prices – your vodka soda might cost 60 percent more in the not-too-distant future – and many economists are scratching their heads at why President Trump is also picking fights with Canada (so friendly!) and Mexico (so queer!) to prove a point.
“The word tariff is my favorite word in the dictionary,” said Trump in remarks at the Conservative Political Action Conference last month. The president’s argument is that, when tariffs were heavily leveraged at the end of the 19th century, America was at its richest. This argument has several flaws. We’re way more productive as a country now than we were back then – over seven times more gross domestic product than 1900 when adjusted for inflation (Translation: inaccurate claim). Income taxes, which comprise the majority of the government’s current revenue, didn’t even exist until 1913. Also, we have this thing called electricity now, so it’s tough to make a quality-of-life comparison to how things were 150 years ago.
Nevertheless, it is what it is. Tariffs are rolling out, groceries are still expensive, and the White House is basically a Tesla showroom now, so queer people should be proactive about taking care of themselves and one another to weather the storm. Here are a few action steps to consider.
In the short term, tariffs may have an effect on products like alcohol, gasoline, and new housing. Remember that it’s the U.S. company that pays the tariff, not the exporting country, so if the company continues business as usual and starts paying the tariff, they’ll usually pass that cost down to the consumer (shorthand: prices will go up). If your zodiac sign is Doomsday Prepper, consider stocking up the pantry so you’re not rationing bubbles anytime soon.
The current tariffs against Canada and Mexico include steel and aluminum, so if you were thinking about purchasing a car, you might want to do that this year, too. A car engine is shipped to both countries during its buildout process, and analysts project the 25 percent Trump tariff on steel and aluminum would translate to a price hike of about $3,000.
A potential trailing effect of tariffs is that companies become less profitable or unprofitable, which can lead to layoffs, so it would also be good to save extra cash right now in the event you encounter an unexpected work change. Higher prices mean less spending, which means less company revenue, which means downsizing, which can mean layoffs and recession. We just had a recession scare in 2022 because of inflation, so you’ve already had a dress rehearsal; organize your finances so that the layoff guillotine doesn’t leave you in a precarious money situation.
Things are turbulent for LGBTQ+ people right now, so it’s time to educate ourselves on economic principles and get tough. When you feel informed, you feel empowered, and that’s an important feeling to cultivate as we navigate the rocky road ahead.
Nick Wolny is Out magazine’s finance columnist. He writes Financialicious, a personal finance newsletter tailored toward queer readers, and is working on his first book, Money Proud, which releases later this year. NickWolny.com @nickwolny
