By Ashna Balroop

University of Maryland community members expressed concern for the economy amid the Trump administration’s tariffs on foreign nations, worried about their potential impact on both the United States and the campus.

Tariffs, or taxes on goods from other countries, are at the forefront of a growing trade war between the United States and countries such as China.

In recent weeks, President Donald Trump announced broad tariffs on countries globally. However, hours after the tariffs took effect on April 9, Trump declared a 90-day pause on all these reciprocal tariffs, except for the one placed on China, so countries can reach agreements with the administration, according to CNN. 

The Trump administration has noted that around 90 to 100 countries have offered to arrange new deals, which presents a difficult task for trade negotiators due to the time limit.

Instead of negotiating a deal, China and the U.S., two of the world’s biggest economies, have raised tariffs on each other. Trump imposed a tariff of up to 145% on Chinese goods, to which China responded with a 125% tariff on American products, according to the BBC. 

On April 24, Trump said that the U.S. and China are actively discussing these tariffs, while a Chinese foreign ministry spokesperson denied this and stated that no deal has been made, according to NBC News. 

Trump believes that imposing tariffs will boost the country’s economic manufacturing and encourage citizens to buy American-made products, according to the BBC. However, the economy has experienced rapid fluctuations as a result.

The Dow Jones Industrial Average, an index of the stock market that tracks the performance of 30 large, publicly traded companies in the U.S., decreased by nearly 1,000 points on April 21, according to NPR. The Dow Jones is considered the health of the American economy and indicates how much trust investors have in the market. 

Sebastian Galiani, a professor in the Department of Economics at UMD, is concerned about the potential implications of a continuing trade war.

“This cannot continue,” Galiani said. “If this continues, we will see a large reduction in trade, a big recession, a big destroy of wealth in the world … that’s not sustainable.”

Galiani believes that if the Trump administration does not reverse its decisions, the U.S. economy will reach Great Depression levels. 

“I think we are going to see the worst economic crisis in this country since the 1930s,” Galiani said. 

If the ongoing trade war continues, public universities like UMD will face the brunt of an unforeseen funding crisis, with consequences such as fewer resources on campus and fewer professors hired, according to Galiani. 

Like Galiani, Daniel Reck, an assistant professor of economics at UMD, feels that this country is headed into uncharted territory. 

“We’ve had trade wars in the past, but nothing, nothing quite like this,” Reck said. “And there’s a lot of uncertainty about how the policy environment is going to play out and how supply chains, global supply chains, are going to react.”

Reck believes there is a possibility that the United States may experience a recession, which is a period of significant decline in economic activity, due to the escalating trade war with China.

“I think there’s a real risk of sluggish growth at best or a recession in the near term, because with broad tariffs around the world and cutting off trade from a major trading partner in China … that will do a lot of economic damage,” Reck said. 

Reck is skeptical about the Trump administration’s rationale for tariffs, as well as the decision to lift tariffs on countries other than China. 

Reck highlights that the trade war will have serious impacts on the stock market’s instability. These effects range from increased costs of goods to a potential decline in student employment. 

“Students at UMD, a lot of them, go and work for the federal government,” Reck said. “So that’s already something of a tenuous proposition right now.” 

Sophomore finance major Alexandra Doncheva is concerned about how the fluctuations in the stock market will impact her future career, as well as that of her friends who were hired for government roles and have had their offers rescinded.

“I have a lot of friends that were supposed to be doing internships at the [National Institute of Health] and these other governmental positions, and now those entire positions have been pretty much removed,” Doncheva said. “I’m looking more into investment banking and private equity, so I think hiring is definitely down for those as well.” 

Doncheva believes the tariffs are stunting U.S. economic growth, highlighting the unpredictability of the stock market during this unique time.

“I think that what we’ve seen with this plunge in stocks is that a lot of the investor sentiment is down, and investors have really lost confidence in the markets overall,” Doncheva said. 

Doncheva believes that the ongoing trade war has caused people to shift their investments to safe-haven assets, which are assets that increase or retain their value during periods of market fluctuations, according to Investopedia. 

“We’ve seen a lot of individuals pivot away from equities and transition more into those safe haven assets, like gold and bonds,” Doncheva said. 

According to Doncheva, the future of the stock market is a very touch-and-go situation. Only time will tell how this will affect the U.S. long term. 

“Things could change tomorrow, and the economy could be great,” Doncheva said. “It just really depends, and I don’t think any of us know what’s going to happen for sure right now.” 

Featured Image: The exterior of the Robert H. Smith School of Business. Photo by Miller-Rogers Tetrick.