IU business economics prof talks of effects of Trump tariffs on Indiana – Indianapolis News | Indiana Weather | Indiana Traffic

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INDIANAPOLIS (WISH) — News 8 asked an Indiana University business economics professor to weigh in on President Donald Trump’s 25% tariffs on Mexican and Canadian imports that took effect Tuesday.

In addition, the tariff on Chinese imports rose to 20%. Of note, the U.S. levy on Canadian energy was limited to 10%.

Beijing retaliated with tariffs of up to 15% on a wide array of U.S. farm exports. Canada plans tariffs on more than $100 billion of American goods over the course of 21 days. Mexico’s president said will issue retaliatory tariffs.

On Tuesday afternoon, Commerce Secretary Howard Lutnick said the U.S. would likely meet Canada and Mexico “in the middle,” with an announcement coming as soon as Wednesday.

Kyle Anderson, a business economic professor at IU Indianapolis Kelley School of Business, told News 8 on Tuesday, “We’re going to start seeing higher prices really in the next few weeks as long as these tariffs maintain in place.”

Groceries, gas prices, lumber and cars could go up in price. “I expect to see new car prices going up hundreds if not thousands of dollars. Other things like gasoline might be 5 or 10 cents, and agriculture, I think we’re look at maybe 3% to 5%,” Anderson said.

Some Hoosiers were already concerned about rising prices ahead of the tariffs and were considering tightening up their budgets. One Hoosier consumer, Maya Harris, told News 8 on Tuesday, “For now, we’re sort of able to offset what we can, but I think everything is about to jump up, so that may not be as possible. We’ll probably have to just cut a couple things out of our normal diet.”

A lot of goods from Indiana — auto parts, pharmaceuticals and crops — are imported to Canada and Mexico. Anderson says the tariffs could gravely affect Indiana’s farming industry and the economy. “If those get more expensive and demand weakens, we could be losing jobs here in Indiana.”

According to Anderson’s data, the unemployment rate in Indiana is fairly low and jobs are available, but he is concerned about a possible recession in the future. “I think we’re seeing some of the actions that companies are taking now to prepare for that, that will lead to that recession. The less investment, less hiring that’s going on right now means we could see it relatively soon.”