Brandon Leuallen, The Business Times

At the Grand Junction Economic Partnership’s 2025 Economic Summit, speakers highlighted tariffs’ potential to reshape global trade and impact Grand Junction’s economy.

Nathan Perry, a Colorado Mesa University economics professor, and Savannah Jermance, a Dallas-based corporate tax consultant from Ryan LLC, spoke to business leaders at the CMU Ballroom on April 24. They noted tariffs’ effects can increase exports, create opportunities in regional supply chains and increase local manufacturing while cautioning about risks such as inflation, market uncertainty and effects on interest rates.

Perry said tariffs, taxes on imported goods, serve three purposes: generating government revenue; retaliating against unfair trade practices; and protecting domestic industries. He cited the late 1800s, when President William McKinley used tariffs of 20 percent to 40 percent to fund government and shield U.S. businesses, unlike the low rates post-World War II that were driven by globalization and the U.S. dollar’s reserve currency status.

Perry called the U.S. dollar’s reserve currency status an “exorbitant privilege” that affected how the country historically dealt with having a trade deficit, because it would make money on foreign investments in the country instead. 

“I’ve argued in my classes for more than a decade that the United States is the only country playing in the free-trade game. Every other country is playing mercantilism, where they are imposing trade restrictions and taking advantage of the U.S,” Perry said, tying this to America’s “exorbitant privilege” as the reserve currency holder.

Speaking about the federal government in the 1890s, Perry said, “Tariffs were a primary revenue source before income taxes.”

He added, “However, today’s complex global supply chains and economic dependencies have transformed the economic landscape.”

Perry presented a chart illustrating a trade deficit persisting since the 1980s, which he believes the Trump administration’s tariff policies aim to address.

Perry said tariffs could bolster local manufacturing because of rising import costs and reduced trade deficits, creating jobs and encouraging U.S.-based supply chains to grow. He highlighted benefits, such as reducing reliance on Chinese pharmaceuticals, and said tariffs might pressure countries such as Vietnam to open markets for U.S. exports.

However, Perry warned that increased tariffs could raise consumer prices, fuel inflation and prompt retaliatory tariffs from countries like China, harming exporters. He forecasted U.S. Gross Domestic Product growth could dip below 1 percent in 2025 until negotiations settle and while uncertainty persists.

“We’re seeing mixed signals,” Perry said. “Tariffs could help some sectors but hurt others. It’s hard to predict winners and losers without detailed supply-chain data.”

Perry also noted the Federal Reserve most likely won’t lower interest rates until everything settles down and it sees what effects tariffs will have long term. 

Jermance, a strategic business tax consultant, described tariffs as an opportunity for proactive businesses.

“It’s not all doom and gloom,” she said. “Economic development corporations are busier than ever.”

She also said she has seen how tariffs have increased demand for domestic production. She cited a tire manufacturer that has seen a surge in demand for U.S.-made tires for golf carts and recreational vehicles, which were previously imported from Asia.

“Their business is blowing up,” she said.

Jermance advised businesses to closely examine their supply chains to uncover both vulnerabilities and opportunities. She suggested regional collaboration to replace imported components with domestic alternatives and promoted “soft pivots,” where companies adapt existing equipment to produce new products. She also encouraged communities to offer incentives to retain struggling businesses and attract foreign firms interested in investing in Mesa County.

Perry described tariff proposals ranging from modest to over 50 percent on countries with trade surpluses, possibly as a negotiation tactic per President Donald Trump’s “The Art of the Deal.”

“Within six months, a lot of the higher numbers could come down,” Perry said, citing potential deals with India.

He cautioned that China might continue to resist, unburdened by U.S.-style elections.

“China could hold out, because they don’t have elections every two years. They could potentially tank their own economy in the short term because they aren’t going to lose the next election,” Perry said.

He also shared his enthusiasm for teaching economics amid evolving tariff policies.

“It’s fun to teach right now,” he said with a grin. “Usually, I’m digging into history to explain tariffs, but this is happening live.”