>> Some consumers are starting to stock up on everyday goods again.

But this time it's not due to a health pandemic.

President Donald Trump's 10% blanket tariffs officially began Friday.

He says they're necessary to strengthen the country's global economic position.

But economists and business owners warn of the uncertainty a trade war could bring to everyone's wallets.

Joining us now with more, our Jack Layton, president and CEO of the Chicagoland Chamber of Commerce, Tyler McCall, co-owner of paper and Pencil stationary store in the Andersonville neighborhood and on Zoom, Stephen Durrell off a professor of economics at the University of Chicago.

Gentlemen, thank you all for joining us.

Professor, I want to start with you.

What is or what would you say is the president's intention with these tariffs?

>> The intention is to bring jobs back from the rest of the world and to stimulate the American economy.

But there's really no reason to believe that intentions are going to be met by the policies.

>> That that was my next question.

You know, there's that 10% baseline tax on imports on all countries that we mentioned higher on dozens of nations.

Could his actions have the intended effect or what might the unintended effect actually be?

>> Well, I think the likely effects and this is certainly the consensus become a slow killer.

Conservative and as well as people and many people in business community is this is going to both raise prices and so be inflation.

Shock.

And also potentially cause a recession in the United States.

And other is unemployment could go from some which is currently 4.2% to a bit over 5%.

And as a result will be in a recession.

>> Jack, leaving you represent members of the business community.

What is your reaction to these tariffs?

Yeah, I think we we feel that imposing blanket tariffs is not the way to go was poorly planned and disorganized.

It's going to raise the costs for businesses.

It's going to drive up costs for consumers.

It's going to impact the supply chains for businesses, whether, you know, we have 50% of our counties manufacturing, all the supply chains, parts go back and forth across borders.

That's going to impacted.

And for Illinois, I mean, we're we're one of the top Export states in the nation where number 4 in the nation, number one in the Midwest are export support almost 8 over 800,000 jobs.

Our foreign direct investment were 7th in the nation and we have almost 400,000 jobs that are impacted by that.

So it will have a significant impact on our economy.

Businesses like stability.

This is creating a lot of instability and we're consumer-driven economy.

And as the professor said, it's going to raise costs, not just for consumers, but for businesses of all sizes in all sectors.

>> And because this is the context in which we keep talking about tariffs, right?

Give me an example.

Lourdes is there one that comes to mind where there was a tariff that has positive intended consequence?

>> Well, there's been the discussion over the years about China and what kind of cares.

They have an intellectual property.

And certainly we need to make sure that other countries are not imposing tariffs on ours that are unfair.

We like free trade.

Maybe we can get the fair trade.

But, you know, we don't like those tariffs or other kinds of stealing of intellectual property.

So we need to focus on those things doing this across the board tariff on all countries, all sectors.

It's not the right way to go because there's not a problem in every area.

There's problems in certain areas.

So we should focus on those focus on growth policies, focus on driving innovation, focus on our work force was our number one asset.

But not this blanket across the board.

Let's focus on areas where we're going to have we have issues with tariffs call.

You and your husband, you are here, your workforce.

That is the 2 of you run a stationery shop in andersonville.

>> What can tariffs like this mean for your business?

Yeah, right now for us, it means a lot of uncertainty, a lot of fear, a lot of anxiety.

And it also means that we are.

>> Rethinking what this year may look like in our business.

This is will be celebrating our second birthday of our shop coming up next month.

And things have been great so far.

Customers have been enjoying the shop.

We've been able to grow, expand our product line, correct?

we just hired our 3rd employee recently.

So those are really exciting things that are happening for us.

But if these is concerned about what the future may hold for our shop, will we be able to expand?

But we'd be able to bring in new product lines.

Will we ever be able to grow the shop will be able to maintain the team that we have.

All those questions ask yourself.

Have you already seen the impact of these tariffs at your shop?

We had yes, a great example.

I have a brand that we've been shopping with 2 years from Paris.

We recently brought in an order $2700 Order of products.

We received that order in early February.

We then received a bill for over $1300 in tariffs and late March for that order because the spring manufactures most of their products in China.

They're designed in Paris and made in China.

That bill could really derail a lot of independent businesses, especially during the winter during slower weeks or slower months.

And the most frustrating part is we have these products on our shelves for a month before we received this bill for the tariffs because we're the little guys.

We don't have a broker.

We don't have the ability to negotiate rates.

We are waiting for the shipper to send us the package than to send us the bill and then we have to pay that bill with then about a week or we started occurring 10% interest on that tariff bill.

So that's a really great example something that's happening in real time in our business and that that can stack up pretty quickly on a small business owner.

Professor.

>> We we talked about, you know, various kinds of impacts.

What might the impact be on jobs of these tariffs?

>> I think impact is going to be negative.

It's going to be winners and But the evidence again and again throughout history is the tears.

economic growth and the winners will this one for the losers.

A good example is the steel tariffs in the first Trump administration.

They did increase the number of people who are employed.

Steelworkers.

But overall, they have order of magnitude greater harm to manufacturing jobs because of the role of steel as a productive input.

So there's a good reason that these are knows better than policies.

They heard other countries is going to be retaliation, hurt us collectively make economies less efficient.

Now, as was noted, one can have the projections to specific treating policies of specific countries.

But there was a relief order in terms understanding American economic growth.

>> We also I guess we've kind of talked about that people with lower incomes and how they might be impacted differently from folks with higher incomes.

>> Well, it's a very important point.

Be impacted differently for 2 reasons.

One of them is the fluctuations and unemployment are not going to affect people at the top of the income distribution is going to affect people who are in jobs are very sensitive to to demand into the the costs of things, steal, etc.

And the second thing is that these these are really regressive taxes is a misnomer to use tariffs or import tax and give us the question who's going to be harmed by that?

higher your income is the more likely you're saving party of greater your savings are.

And so, you know, in some this is not county identity are less affected.

Also the capacity to substitute out for people in higher income levels is going to be great people are comparatively disadvantage.

So it's a very regressive tax and you combine that with the employment effects and it's really going to hurt the less less it slow.

This is >> Jaclyn, what we know about how consumers are reacting to this and the impact it's having on the mind-set of consumers.

Well, the mind-set of consumers, you just heard Tyler, small business in Andersonville neighborhood in Chicago.

And he's already going to already seeing the impact consumers are pulling back.

We see it with businesses and consumers.

We start hearing them.

The cloud is hanging over the horizon.

We're going to pull back.

Maybe we are going to spend as much money because I don't know what's going to happen in one month, 2 months, 3 months.

And if consumers are pulling back, businesses are pulling back spending.

That becomes self-fulfilling prophecy to lead to.

That's economic activity.

I do want to say the word recession, but less economic activity.

A good example tourism, international tourism.

Chicago's been a little slow in coming back from that.

But international tourists spend a lot of money.

We're creating this.

I say bad will around the world.

Canada's and example there.

Our number one trading partner.

They also have a lot of people come to Chicago and it looks like maybe.

I know some estimates 20% down.

That's a median sales tax revenue hotel, tax revenue that comes to the city and the state and less people coming here.

So it's going immediate impact, medium term long term Act.

Tyler, what are you hearing from customers so far?

So far?

Our customers have been great as we have discussed this openly with them using our social media channels chatting with our customers in person.

>> They understand that this is something that is impacting us and that's making us and just about the future of our shop.

So they are continuing to shop with us.

We had a great weekend this past weekend after last week we talked about this on social media.

We talked about this tariff bill that we received.

People made a point to come in and support us.

My concern is that what happens when everything starts to increase?

What happens when all those prices increased?

What happens when it may not be as feasible for folks to make that conscious choice to choose to support a local independent shop because we're always going to be more than likely more expensive than what you'll find on.

Amazon are in a big box retailer.

So at what point does it become been feasible to keep supporting local shops?

That's that's the problem with this.

The way it was rolled out, you have a tear of a pullback have to tear it creates the instability for a small business owner for large business owners for consumers.

They don't know what to do.

So they're going to pull back and that hurts the economy.

Professor, we're just about out of time, about 30 seconds.

What would you say is the significance of trading as opposed to solely manufacturing our own goods?

>> Rate is people making decisions that are mutually beneficial a fundamental principle in economics is a fundamental principle in life.

Effort bring back jobs here.

First of all, it's largely another received.

jobs are not going come back.

They're they're frequently discussed instead recently going to higher prices and less efficient economy.

And Laurie, lower economic growth.

Those are not controversial.

Predictions.

I guess it would also like to add the importance of distinguishing the harms of terrace when they're well implemented versus the rhetoric way, which was mentioned.

In other words, when tariffs are proposed, tariffs are withdrawing Paris or use his bully as as sticks to bully people.

When justification is are given that are transparently incorrect.

6 is claiming that the numbers that were representative retaliatory that just adds to uncertainty.

And that's exactly what can I and you can cause a economic decline.

>> All And unclear outlook.

It sounds like, but think you all have a pretty clear picture of what this what this could be public to be talking about it