Tariffs unleash chaos in markets, uncertainty for business

Monique Carriger: Tariffs offer an opportunity to note 70% of Hondas are U.S. built.

David Mitchell: There is no apparent logic to tariff amounts or targets.

Eric Burlison: President is using tariffs as a tool to achieve a better outcome.

• 
• 
• 

On April 2, President Donald Trump announced sweeping tariffs on imports from nearly every country the U.S. trades with. The market responded the next day with what was characterized as its steepest plummet since 2020 – a 1,679-point drop, or 4%, in the Dow Jones Industrial Average, a 4.8% drop in the S&P 500 and a 6% drop in the Nasdaq composite. An even bigger drop was recorded April 4, as China announced a sizable retaliatory tariff and the Dow tumbled another 2,200 points.

On April 9, Trump announced a 90-day pause on the new tariffs against all countries but China. The market rebounded with a historic rally, with the Dow posting a 2,963-point, or 7.87%, gain, the S&P 500 rising 9.52% and the Nasdaq rising 12.16%.

An apparent trade war between the U.S. and China continues, with a 125% tariff on Chinese imports into the U.S. and a reciprocal tariff of 84% on U.S. goods imported into China at the time of this publication.

In 2024, U.S. customers bought $438.9 billion in Chinese goods, according to U.S. Census Bureau figures.

Import impacts
At Pinegar Honda, General Manager Monique Carriger said tariffs provide a unique opportunity.

“Now that tariffs are widely discussed, we are optimistic as this gives us a chance to really brag about the Hondas we sell,” she said.

Carriger said 70% of Pinegar’s Honda stock is built in Ohio, Indiana and Alabama, making the car company second only to Ford for U.S. production, with 79% domestic output among full-time brands.

“That local footprint puts us in a strong spot, even with tariffs dominating the headlines,” she said. “Because the company already buys about $29 billion in parts from 620 U.S. suppliers across 34 states, our supply chain is overwhelmingly domestic, cushioning any cost pressure on global components.”

While many of Trump’s tariffs are on pause, he did not address the 25% tariff on imported vehicles and vehicle parts, which remains in place. Major automakers like Audi and Volkswagen have paused shipments to the U.S. due to tariffs in place.

Industry experts expect car sales to decline and prices to rise due to tariffs. Goldman Sachs now expects U.S. auto sales of 15.4 million units in 2025, compared with its previous estimates of 16.25 million units, according to media reports. It also lowered estimates for 2026 sales by 1.1 million to 15.25 million units.

Back in Springfield on Pinegar Honda’s showroom floor, Carriger said inventory is stable, and U.S. Honda plants are running full shifts. And pricing will be predictable at her dealership, she added.

“With limited exposure to fully imported vehicles or key parts, we don’t expect the sticker shock some brands are warning about,” she said.

She added that Honda is currently investing $2.4 billion in its U.S. facilities to expand its line of hybrids and electric vehicles to keep the company ahead of any future policy changes.

“That said, we are optimistic as we move forward,” Carriger said. “We pivoted quickly during COVID-19 and are prepared to do so again if needed.”

Other retailers report the same type of uncertainty that has driven stock market upheaval.

Just inside the front doors of Kaleidoscope, a Springfield retailer in business for half a century, stands a wall of shoulder bags, fanny packs and backpacks. Most of the textile products have been stitched together half a world away in Nepal or Guatemala. And on a rack beside them, filling the room with fragrance, are rows of incense – sandalwood, Nag Champa, patchouli and more – manufactured mostly in India.

Asked if the on-again, off-again tariffs concern her, manager Whitney Creehan replied, “None of our companies have really said much, but everyone is on alert.”

The merchandise on the shelves at Kaleidoscope is not imported directly but instead comes from suppliers, she said.

“I’m assuming we’re going to see prices we’re paying going up,” she said.

In the adult portion of the store, called Eros, almost all toys are sourced from China.

However, some of the store’s merchandise is tariff proof, according to Creehan, including the recent addition of thrifted apparel and knickknacks, and possibly including the store’s body jewelry, all of which is American made.

It may be a while before tariffs impact prices of things like incense, which is well stocked in the store and has been ordered by the case by the supplier.

“I’m not sure how often the people we get it from are reordering it or how far down the chain we are,” she said.

Creehan said the store sources merchandise from all over the world.

“You can’t get a Guatemalan-style purse from anywhere but Guatemala,” she said. “That’s just where you get it from.”

She said one supplier is a person who travels internationally and comes in four times a year bearing fair-trade products from Thailand and Guatemala.

“That will be the big thing that is impacted, pricewise,” she said.

Lawmaker optimistic
U.S. Rep. Eric Burlison, R-Missouri, characterizes himself as a small-government conservative who takes a dim view of tariffs, but he believes Trump’s tariffs will prove to be beneficial in the long run.

“I’m not going to shy away from the fact that I think taxes and tariffs are not a good thing, but to me, he’s using it as a tool to achieve a better outcome,” Burlison said in an April 3 phone interview with Springfield Business Journal.

Burlison, a Springfieldian who represents the state’s 7th District, said the U.S. has changed.

“We’re no longer a nation that’s producing – we’re not a net productive nation; we’re purchasing more from other countries than we’re selling back to them,” he said. “We can’t sustain that, economically.”

Trump’s trade policy move is a historic one, Burlison said.

“While this may be painful in some aspects, we are facing an existential crisis when it comes to our trade and when it comes to our debt,” he said. “We have to make very bold moves.”

Logic questioned
Economist David Mitchell does not share Burlison’s optimism.

“I don’t expect good things from it,” he said of the tariff imposition in an April 3 phone interview with SBJ.

Mitchell, director of the Bureau of Economic Research and the Center for Economic Education at Missouri State University, noted the last time the nation similarly enacted broad tariffs – the 1930 Smoot-Hawley Tariff Act, which boosted import tariffs by 20% – the world was much less interconnected.

That move led to an international trade war and contributed to the Great Depression.

“That’s a huge concern of mine,” Mitchell said. “I could see that kind of issue coming into play again here.”

But Mitchell said he understands the president’s thinking with the move: Trump believes the U.S. is sending good jobs to Mexico, Vietnam, China and other countries because the cost of hiring their workers is so much lower overseas.

“He believes sending jobs overseas is a bad thing, but in the U.S., it just doesn’t make sense for us to make some products,” Mitchell said.

As examples, he cited two disparate products: T-shirts and aircraft. Production of T-shirts does not require a skilled workforce, but aircraft production does – and the U.S. has a large percentage of the world’s supply of skilled labor.

It comes down to the idea of comparative advantage – something Mitchell said an economics student would learn on Day 2 of an introductory class in the subject. Comparative advantage is the ability to produce goods at a lower cost than one’s competition. There is no comparative advantage for the U.S. in manufacturing low-skill goods, Mitchell said.

Trump’s announcement applied a baseline tariff of 10% on nearly all countries beginning April 5, but some countries were set to face much higher tariffs beginning April 9 – two examples being Cambodia, whose key export is apparel, at 49%, and Vietnam, whose biggest export is computers, electronics and components, at 46%. With the exception of China’s, those new tariffs are on a 90-day pause.

The president reported in an April 8 address at the National Republican Congressional Committee Dinner that countries are calling him to try to negotiate trade deals.

“I am telling you, these countries are calling us up, kissing my ass,” he said during the speech.

According to Mitchell, some of Trump’s tariffs are nonsensical and are levied against territories that produce nothing at all. He pointed to tariffs on islands that have no permanent human populations – among them the Antarctic Heard Island and the McDonald Islands and the Arctic volcanic island of Jan Mayen.

“Manufacturers are not going to suddenly move to an island in the sub-Antarctic,” Mitchell said. “That’s absurd. It makes it look like you don’t know what you’re doing – like there wasn’t a plan.”

Mitchell said there doesn’t seem to be a lot of logic behind the nations targeted or the tariff amounts assessed.

“It’s like some clerk went to Wikipedia and got a list of every single country and territory in the world, created a list and added a number,” he said. “Some of these things don’t even make sense.”

Reshoring factories
Burlison thinks the tariffs will have the effect of bringing manufacturing back to U.S. shores.

“I’ve spoken with multiple manufacturers who manufacture overseas yet headquarter in Springfield, Missouri,” he said. “This is incentivizing them to reshore back to the United States.”

He added that he has presented an idea to Trump and to the House’s Ways and Means Committee chair, Rep. Jason Smith, R-Missouri. His notion is to create an avenue for businesses that want to bring manufacturing back to the U.S. now that they’re facing higher tariffs.

“What I think we should do is offer any company that wants to move their manufacturing into the U.S. a reprieve on the tariffs they would be paying for a period of, say, two years,” he said.

Then, if those companies don’t reshore their manufacturing here within two years, they will be responsible for paying the back tariffs.

“That would give them some financial motivation and wiggle-room to come back,” he said.

He added that he has spoken to business leaders, and the consensus seems to be that two years is a reasonable time frame.

Mitchell has his doubts that manufacturers can immediately decide to open a factory stateside.

“This is not a lemonade stand people are trying to set up. They can’t open this tomorrow,” he said. “It can take years to start a new factory – decades to start new supply chains that are actually going to be relevant, cost-effective and reliable.”

Manufacturers know there’s a chance the tariffs may be abandoned in six months – or reversed in four years, when a new president takes office.

“We might see a lot of people waiting until Trump is out of office on the assumption that the new president comes in and lowers tariffs,” Mitchell said. “I can see people holding off and waiting four years before building a factory to make T-shirts.”

Local impacts uncertain
Asked to gauge the sentiment of his organization, Grant Miller, president of the Springfield Contractors Association, said it is too early for him to have received specific feedback from members.

“The general feeling in the industry is just uncertainty as to what the impact will be,” said Miller, who is also president of commercial and residential glass installation firm Springfield Glass Co. “It certainly will raise construction costs because we do have a lot of raw materials, at least, that are imported. The effect of the cost on the completed building will be just a few percent overall – I think. I hope.”

Where construction is concerned, Miller predicts the immediate impact will be a frenzy of activity.

“The immediate impact is acceleration of ongoing plans, trying to get orders placed quicker to beat the tariffs,” he said.

And the next impact will be delivery delays because of all of the incoming freight from current orders.

“That’s going to affect the ports,” he said.

Responding to the question of whether he favors Trump’s tariffs, Miller said his comments do not reflect his position as SCA president.

“I don’t know what the short-term economic impact will be, but I do feel like the long-term economic impact will be good,” he said. “That’s just my personal belief, but I think this will drive long-term fairness in trade.”

He added that there will also be benefits in the short term as the manufacture of some goods will shift quickly to the U.S. as a result of the tariffs.

“I do think there are some things that can be done quicker than we know just by moving the assembly of things that may have been happening just across the border,” he said. “They may have moved to Mexico recently. Maybe they can move back.”

Miller acknowledged this is a time of uncertainty – a condition business leaders do not relish.

“The important thing with this time of uncertainty is the same as any time of uncertainty,” he said. “Be calm and make educated decisions best you can, and don’t make emotional decisions.”