What Do Tariffs Mean For Southern Maryland?

CALIFORNIA, Md. — Tariffs are a common tool for trade between countries, and President Donald Trump has encouraged their use to bring jobs back to the U.S. and reduce long-term reliance on foreign trade partners. However, if improperly implemented, tariffs can have consequences for small businesses and everyday consumers.

Since President Trump returned to the White House in January, he’s worked to impose new tariffs of varying amounts, specifically on imported products from China, Mexico, and Canada.

Most of the tariffs range between 10% and 25% on an array of different products. A 25% tariff on all aluminum and steel imported to the U.S. has also been imposed.

Importers in the U.S. pay the price of a tariff initially, though the increased cost trickles down to businesses, who then mark up the price of everyday goods. Tariffs on metal can potentially affect the price of machinery, vehicles and even furniture.

How Will Increased Tariffs Affect Southern Maryland?

New tariffs stand to impact everyone, from importers to grocery store shoppers, but higher prices aren’t the only issue. President Trump’s proposed tariffs on Canadian products were delayed twice, sending mixed signals down the supply chain.

The president first delayed the tariffs in February, then again in early March. Delays provide more time for negotiations, but they can also have a negative effect on domestic trade.

The BayNet spoke to store manager James Hood, who orders the lumber at Dyson Building Center in St. Mary’s County. He explained that the price of wood has been fluctuating, causing confusion and stress.

When James tries to order wood, it can be challenging to predict prices since it’s unclear when the tariffs will solidify, if ever.

He shared: “The weeks when the tariffs were supposedly going into effect, I called one of my vendors, and prices had already gone up. And then, when the tariffs don’t go through, I call back, and prices are stabilized.”

Though businesses like Dyson Building Center can adapt to new tariffs, postponing them repeatedly has detrimental effects on the marketplace.

“It keeps companies, and myself in particular, from ordering what I would typically order. I don’t want to order something, and then next week the price goes down. Then I’m sitting on lumber that’s now depreciating.”

In the long term, higher tariffs could create fairer trade and increase domestic production. However, middle-class Americans and small businesses will feel the financial stress in the meantime.

On March 19, President Trump posted to Truth Social, encouraging the Federal Reserve to cut interest rates, which could help offset higher prices in the initial months.

“The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2 is Liberation Day in America!!!”

Though it’s clear that tariffs will cause financial strain across the U.S., additional measures can be taken to help offset the impact on domestic businesses and everyday Americans.

Tariffs: President Trump’s Long-Term Goals

The Trump administration believes that higher tariffs will increase manufacturing in the U.S., decreasing America’s reliance on foreign trade partners. President Trump also seeks to abolish trade imbalances between Canada and the U.S.

On March 7, President Trump said: “In Canada, we find that they’re charging us over 200% for dairy products. You know about that. And when I left, we had that well taken care of, but under Biden they just kept raising it.”

Tariffs exceeding 200% should only become active if exports of dairy reach specific limits, which hasn’t yet occurred. The senior vice president of trade and workforce policy at the International Dairy Foods Association (IDFA), Becky Rasdall Vargas, said in a statement:

“It is accurate that Canada imposes a tariff of approximately 250% on U.S. exports of certain dairy products into Canada, and even more with Canada’s 25% retaliatory tariffs in place. However, that tariff would only apply if we were able to reach and exceed the quota on U.S. dairy exports agreed to under the U.S.-Mexico-Canada Agreement (USMCA).”

“Frustratingly, the U.S. has never gotten close to exceeding our USMCA quotas because Canada has erected various protectionist measures that fly in the face of their trade obligations made under USMCA.”

Vargas also shared that though the IDFA appreciates President Trump’s efforts, the unpredictable tariff war creates uncertainty in the marketplace.

“U.S. dairy is grateful for the Trump administration’s efforts to hold Canada accountable on these protectionist measures. At the same time, a prolonged tariff war with our top trading partners will continue to create uncertainty and additional costs for American dairy farmers, processors, and our rural communities. We urge Canada and the United States to negotiate a resolution to these issues – both Canada’s trade barriers to U.S. dairy exports and the tariffs – as expeditiously as possible.”

Dairy farmers and consumers alike will feel the impact of increased tariffs, but the uncertainty is the real problem.

If the trade war continues to escalate, then U.S. businesses will likely increase the price of everyday products, including milk and building materials, among many other items.

A New 2.5% B2B Tax May Be Coming to Maryland Soon

Increased tariffs are making headlines across the country, but Maryland is also considering legislation that could be costly for local businesses. HB1554/SB1045 would implement a 2.5% tax on business-to-business services, such as consulting and accounting.

The goal of a B2B tax is to lessen Maryland’s budget deficit. The latest proposal could affect the operations of all businesses throughout the state, especially in the midst of new tariffs being placed on America’s closest trade partners.

The synopsis for HB1554 reads: “Altering the definitions of ‘taxable price’ and ‘taxable service’ for the purposes of certain provisions of law governing the sales and use tax to impose the tax on certain labors and services if both the provider of the service and the buyer are business entities; and specifying the rate of the sales and use tax for certain labor and services.”

As Southern Maryland businesses and residents brace for the combined impact of federal tariffs and potential state-level taxes, the economic landscape remains uncertain. While the long-term goals aim to strengthen domestic industries and stabilize trade, the immediate effects could place added pressure on small businesses, working families and local economies already navigating shifting market conditions.

Contact our news desk at news@thebaynet.com