Americans are currently getting an education in tariffs — taxes charged on imported goods — much as they had to get up to speed on supply chain issues when the COVID-19 pandemic led to shortages in things like surgical masks and toilet paper. 

June Youngs, an executive in residence in Bryant University’s Management department, is an expert in both, having worked as vice president of logistics for CVS Health, a supply chain and manufacturing director at Ocean Spray, and director of transportation and distribution services for Nabisco during her career. 

Youngs recently sat down for an interview with Bryant News to talk about the international trade and tariff wars that have erupted during the first weeks of the second Trump administration.

Bryant News: How have tariffs been used historically?

Youngs: Alexander Hamilton put one of the first U.S. tariff rules in place. Since then, they have been to protect our country, businesses, and so on. My brother worked for US Steel, and I remember when Japan was dumping steel, we put in tariffs to protect the U.S. steel industry. Even when Trump was in office last time, a lot of his tariffs were kept by Biden. They've now taken on an interesting spin with the style of the president that we have today. 

Bryant News: Haven’t tariffs normally been targeted, as opposed to putting a tariff on all imports from a country? 

Youngs: I think they've been more targeted. We have had tariffs on specific commodities. It was always something that a country was trying to protect: a business or a commodity.

Bryant News: Prior to this latest trade war, what has been the tariff situation between the US and Mexico and Canada?

Youngs: We've had North American Free Trade Agreement (NAFTA), now the United States-Mexico-Canada Agreement (USMCA), which allowed the free movement of trade between Canada and Mexico and the U.S., and was intended to help with growth. That's actually up for renewal in April. So we had both free trade and tariffs between these countries. A lot of countries have set up what they call production facilities in the free-trade partner countries; for example, China has shell warehousing in Mexico, where they bring products in and ship it from Mexico to the United States to duties or tariffs. That’s something that I think they're going to be taking a look at. 

Bryant News: There seems to be a perception that China and Mexico imposed more tariffs on the U.S. that we do on them. Can you speak to that?

Youngs: It’s not necessarily the tariffs as much as the valuation of what we buy from various countries. We do a lot of importing, and it's a lot harder for them to buy our goods. For example, Canada doesn't allow the U.S. banking systems to operate in Canada. I think the president is looking at it as having more balanced trade, and he hasn't felt that NAFTA has really helped us in reference to our exports. 

U.S. exports are much lower than what we have on the import side. Canada, Mexico, and the U.S. are not balanced at all, so there's got to be a way to make it more favorable for all countries involved. 

Bryant News: Is that more a product of disparities in the agreement, or because we don’t produce as much for export as we used to?

Youngs: I'm not sure, honestly, whether it's because we don't make it here. It has gotten to where U.S. exports are much lower than what we have on the import side. Canada, Mexico, and the U.S. are not balanced at all, so there's got to be a way to make it more favorable for all countries involved. We import machinery, fuel, and manufactured goods from both Canada and Mexico; we export cars and we export petroleum. Is there an opportunity to do more of that? 

Bryant News: These broad-based tariffs seem to be a blunt instrument; if both sides impose tariffs, who benefits in the long run? 

Youngs: I believe that this is more of a negotiation tool. They need us and we need them. Compared to other presidents, this is a more aggressive style based on the way that Trump negotiates. 

As an international supply chain person, I think they're using this as a negotiation, just like all of us do when we're making decisions. Sometimes we say it's an all-or-nothing deal, and then you get people at the table. 

Bryant News: Does brinksmanship become less effective over time? 

Youngs: I think so. I think the approach to get people to come to the table first and then to build relationships is really important. When you study Walmart, for example, they would say to producers within the United States, we are going to set the price at this point or we won't even see you. They won't even come in and talk to you. Is that a hard line? Absolutely. But it got you to the table and you knew the volume and you knew the impact on your company. You knew the impact of having a distributor like a Walmart to reach consumers. You can look at this and see how it could be broadened on a global basis. 

You and I would probably do things differently. But I do like the fact that it gets people to the table and then you have to start talking. In this president's case, I think he wants a lot of movement, fast. And I think that's what's driving this. I'm not saying whether that's the best approach or not. 

I believe that this is more of a negotiation tool. They need us and we need them. Compared to other presidents, this is a more aggressive style based on the way that Trump negotiates. 

Bryant News: If you're seen as an unreliable or faithless business partner, don’t you also run the risk of people looking for other markets? 

Youngs: Yes, you can. And for anybody that puts tariffs on, I think people can look at other opportunities. It does shift the whole global supply chain, and it can be a permanent shift. 

Bryant News: Do tariffs ultimately work in the world we live in now? Can the U.S. market be replaced? 

Youngs: There is huge purchasing strength in China. There could be in Russia, too. I don't think we could look at just a U.S.-first policy, because I think, long term, we're all in this and we're all interconnected. As people around the world start to enrich themselves individually, there’s going to be more of a market. 

There’s a lot of investment in the U.S. to move manufacturing back here. They opened a chip manufacturer after the COVID debacle where Taiwan was the only chip manufacturer in the world. Biden did that. There's going to be more of that here. 

But can we make everything here? No. Even if we could, we still have to import a lot of the items that we need, the materials, the metals, whatever, to create that ability.

Bryant News: Are the costs of tariffs always passed through to consumers? 

Youngs: There is an inflection point. Let's say car prices went up outrageously high; we probably wouldn't purchase them. We probably would extend the life of our used cars, instead.

There's been plenty of prices that would increase in food products: sugar, flour, what we're seeing right now with eggs. There's been some quotes in the last few days that tariffs could cost American households an average of $1,200. I'm not convinced on that. I’ve seen that pricing influences don't always get passed down. It’s a question of whether it's short term and then it goes away and there isn't a lot of retaliation, or long term -- I don't know how much the consumer would be willing to purchase at a higher price. 

Bryant News: Every company needs to make a profit. How much flex is there in the system? 

Youngs: You could find it, but it isn't a well you could go to that often. There's pricing that may be favorable on other items that you produce or what you sell or what you distribute. So you may have other opportunities where the pricing falls that offsets where your pricing is higher. 

Bryant News: Does it make economic sense to bring manufacturing home to the U.S.? 

Youngs: I remember when I worked for Hasbro that it made more sense when they made Easy Bake Ovens in China to bring them into the U.S. and then, when you needed to put in the mixes to make your cupcakes or whatever, ship them back again. The labor in China was that cheap. Not all products are going to be able to be made here. I think if I was making decisions, it would be the products that would be most advantageous to have locally. We all can't produce everything in every country. We need to figure out how to balance trade in a healthy way.

I do believe that this tariff issue will get solved quickly, because honestly the global economy can't survive with this type of disruption, and this will be a cascading issue that isn't sustainable. 

Bryant News: Would American consumers be willing to pay more for American-made goods, or endure some hardship in order to bring manufacturing back? 

Youngs: I remember when I was getting my MBA and the CEO of this company came in and asked if we would be willing to pay $100 more if Air Jordans were made in the U.S. Everybody said no. I wonder how they would answer that today. It'll be interesting to see what the American people will do. 

Bryant News: What products do you think we think we could make here?

Youngs: The obvious ones are fuel and mining. I think that we have a pretty strong supply of agricultural products. I think our number one product going to China is soybeans.

Bryant News: Are we ever going to be making manufactured products, like TVs and microwaves and refrigerators, in the U.S. again? 

Youngs: I can't see why we can't do microchips. I can't see why we can't do steel. 

I do believe that this tariff issue will get solved quickly, because honestly the global economy can't survive with this type of disruption, and this will be a cascading issue that isn't sustainable.