While sitting in my macroeconomics class the other day, I realized my phone was ringing off the hook. It was my sister calling; she was seeking advice about purchasing a new laptop, something she wanted to do before President Donald Trump’s recently announced tariffs took effect, concerned that they would make tech products unaffordable. She sought me, her younger sister who is pursuing a degree in economics, for the what’s-what when it comes to economic policy, hoping I’d have some insider knowledge. And she’s not alone — the confusing nature of this tariff situation has everyone in a tizzy. Even while writing this article, my friends are peeking over my shoulder and asking questions about why the tariffs were enacted and what they can expect.
Since his recent inauguration, Trump has announced a heap of tariffs — taxes on foreign goods being imported into a country — and other economic plans that have left the internet overflowing with confusing hot takes, hilarious memes, and fresh headlines every hour as people try to make sense of what is going on, especially since it seems to change from day to day.
While there’s still so much unknown about the tariff situation, the champion phrase among my friends (and it seems every college student) these days is: I should be saving money. However, it never truly sticks for me — I mean, I do deserve a latte before class, and concert tickets are always a good idea. And after seeing my sister prepare for potential price increases and hearing all the conversations around me, I realized it was finally time to ask myself: How, exactly, should I be preparing for the tariffs as a college student? And how can I use my knowledge as an econ major to get through this uncertainty?
So, I spoke to Dr. Matthew Cole, an economics professor at my school, Cal Poly, to understand if I truly need to cut costs and finally keep to a budget in preparation for the potential effects of the tariffs. (Because yes, many professors are more than willing to share their vast knowledge outside of just the classroom!) After speaking with him, here’s the tariff game plan I came up with:
I’m preparing for costs to rise.
Despite Trump seeming to make constant changes to his tariff policy, it seems college students are likely going to feel the effects of Trump’s tariff decisions, no matter what he decides to do about them next. “Even if Trump backs down in a month, the damage has already been done,” Cole tells me, explaining that there are a multitude of factors for rising prices in relation to the whole tariffs situation, such as production halts and growing distrust with American currency, in addition to the obvious fact that imported goods are likely to get more expensive as a direct result of the tariffs.
TBH, this fact has me looking at my typical spending with fresh eyes. I never realized how many goods are imported until I was eyeing a Lululemon set to wear during my upcoming half-marathon and realized that, as a Canadian brand, Lulu might become much more expensive soon, so I rushed to get my hot pink running shorts before prices skyrocketed.
Aside from a few panic-buys, though, in attempt to account for growing costs, I will be more money conscious about my spending, focusing on eating out less, being picky about where I buy my gas (thank you, Costco) and how I use it, and remembering that I do have clothes in my closet and don’t always need to buy new.
I’m saving up for my study abroad semester.
My fall semester abroad is top of mind as I make financial decisions this spring and summer, because I figure if prices are increasing in the U.S., then they are increasing in other countries as well. In terms of international relations, I did have some concerns that I would be looked down upon as an American amid all the tariff concerns (as well as the country’s overall political climate), but Cole reassures me that “people are mature,” and although a question must be asked if foreigners will continue to buy American goods, he does not think people abroad will hold this situation against the American people as a whole. Phew.
I’m staying informed, but calm.
When asked about a recession, Cole believes the country is headed in that direction, though it is too early to know how bad or how long it may be. He was adamant that experts, including those in Trump’s administration, do not know what will happen because things are changing every day as new tariffs are drawn and rescinded. So, the best bet is to think smart but don’t panic.
In terms of the job market — something that’s of course top of mind for most college students — if companies need to cut costs and employment opportunities shrink, then I will simply continue to put one foot in front of the other. I will not worry about something that I cannot change, so I will work hard and vie for internships, just like I would do if I wasn’t so concerned about the economy.
It all comes down to this: There isn’t a definitive answer on which tariffs will be implemented and exactly how they’ll impact consumers, so I’m taking this whole situation as a lesson to be more conscious of my financial decisions, because we never truly know when an economic downturn might occur. But I’m also keeping in mind that I still have to live my life, which may include the occasional $50 DoorDash order… because whoever said you can’t buy happiness hasn’t eaten a late night burrito, am I right?