Tim Tai

President Trump’s recent tariffs on imports from Canada, Mexico and China could have significant economic impacts, according to Yale economists who spoke with the News.

On Monday, Trump published a public notice detailing his plan to impose tariffs on all imports from Canada and Mexico, following a 10 percent tariff on China from Feb. 4. As of 12:01 a.m. Tuesday, the U.S. is scheduled to begin collecting a 25 percent tax on all imports from both countries, along with a doubling of duties on Chinese goods to 20 percent. 

Jefferey Sonnenfeld, associate dean at the School of Management, said there is uncertainty about the extent to which U.S. institutions like Yale will be impacted, especially given that Mexico has not yet imposed retaliatory tariffs. 

“There’s a reasonable chance that this is yet again, trust destroying, and may not last,” Sonnenfeld said. “More than anything else, it’s the antagonistic relationship with close partners in North America, Canada and Mexico, and this sense of confusion with companies and institutions that had abided by the U.S.-Canada trade agreement — which was Trump’s own agreement — that he now says was a terrible agreement.” 

According to Ernie Tedeschi, former White House chief economist, given that the tariffs are regressive taxes, particularly in the short run, low-income households will bear the greatest burden of the tax.  

Because China’s tariffs strengthen the dollar and weaken the Chinese yuan, Yale’s tuition and other expenses, priced in U.S. dollars, will effectively rise for international students from China, Tedeschi added. 

The Budget Lab at Yale,  a non-partisan policy research center analyzing federal U.S. economic policy proposals where Tedeschi serves as Director of Economics, modeled the effects of the planned China, Mexico and Canada tariffs in a research report published on Monday. According to the report, price levels will rise by 1.0-1.2 percent, the equivalent of an average per household consumer loss of $1,600–2,000. 

“If the 25% tariffs on Canada and Mexico go into effect, the impact on Yale will be more pronounced, with food, energy, and construction materials getting pinched,” Tedeschi wrote to the News last week. “To the extent the Yale community relies on [international goods], expenses could go up.” 

Regarding the Mexico tariff in particular, Tedeschi said that the University might “redirect certain supply chains” given that the U.S. sources one-third of its fresh produce from Mexico. 

For instance, he explained, Yale dining services might opt for domestic or lower-tariff sources of fresh fruits and vegetables. He added that the strategy is not “fool-proof,” given that domestic firms that compete with tariffed industries often opportunistically raise their prices in tandem with tariffs. 

In an interview with the News, Yale College Dean Pericles Lewis said that financial changes such as endowment taxes and tariffs from the federal administration would likely have a “big impact” on the University. 

University President Maurie McInnis stated last week that the University remains cautious about how the financial changes may directly affect work at Yale and that it will continue conversing with lawmakers and lobbying in Washington to “advocate for the mission of higher education.” 

The Budget Lab at Yale was founded in April 2024 by a Yale Law School professor, former White House Chief Economist and former White House Senior Economic Advisor. 

Jerry Gao contributed reporting.