TALLAHASSEE, Fla. — The ongoing trade war between the U.S. and, well, the world may threaten the promised permanent tax cuts for Floridians, as stock market volatility raises new concerns.
On Friday, the opening bell at the New York Stock Exchange triggered another massive sell-off, with the Dow Jones Industrial Average plunging by more than 2,200 points. The S&P 500 dropped 10% over just two days, a dramatic downturn as President Donald Trump's tariffs on nearly all imported goods are set to take effect Saturday.
WATCH: Economists uncertain about long-term effects of tariffs on states like Florida
“We put ourselves in the driver's seat,” Trump said earlier this week. “If we would have asked some of these countries, almost most of these countries, to do us a favor, they would have said no. Now they'll do anything for us."
The president's optimism aside, economists remain uncertain about the long-term effects of the tariffs, especially for states like Florida that rely heavily on tourism dollars.
“Especially in terms of the stock market and the overall economy, uncertainty is the enemy of growth,” said Chip Lupo, an analyst at WalletHub.
Lupo warned that the tariffs could spark a chain reaction across the U.S. economy, driving up prices, reducing household incomes, and potentially plunging the nation into a recession — especially damaging for states reliant on tourism.
“The average American consumer and household is really not in a position for a game of chicken,” he added.
Meanwhile, at Florida's state capitol, the debate over tax cuts rages on. The Florida House moved forward with its proposal to permanently reduce the state’s sales tax rate by 0.75%. Despite the recent market dive, House Speaker Danny Perez (R-Miami) remained committed to the tax cuts.
“We’re cutting $5 billion in recurring revenue,” Perez emphasized. “This is real. It's not non-recurring. It's not one time. It's not a tax holiday. It is $5 billion of real cutting going back to the people.”
However, not all lawmakers are on board with permanent cuts. Senate President Ben Albritton (R-Bartow) has expressed reservations about implementing permanent sales or property tax cuts, citing the risk of a recession.
In a statement released Monday, Albritton made it clear that economic circumstances might force lawmakers to backtrack on a permanent reduction.
WATCH: GOP split on sales vs. property tax cuts
As stocks started their plunge on Thursday, Albritton reaffirmed his cautious approach.
“You know, with the Dow, or any other economic measures, we look for trends,” said Albritton. “We're trying to understand all of these moving parts that are hovering around the economy. So, are we contemplating losing revenues or having, you know, fiscal challenges going forward? 100% yes, sure.”
Governor Ron DeSantis has yet to comment on how the trade war or market instability might impact his fiscal plans. On Monday, DeSantis proposed a $5 billion property tax rebate program aimed at saving homeowners an average of $1,000 a year on homesteaded properties.
Congressman Byron Donalds (R-FL 19th), who recently announced a bid to succeed DeSantis, also weighed in during a visit to Tallahassee this week. Although Donalds refrained from endorsing a specific tax plan, he defended the trade war, arguing that tariffs are necessary to protect U.S. interests.
“The American people and their economy cannot continue to be taxed and taken advantage of just because we want to allow other countries to get rich off our markets,” said Donalds. “It’s not right. We’re going to fix it. The economic pain we’ve already felt is because of the terrible economic policies of Joe Biden. Twenty percent inflation —that’s actual pain, not the thought of what tariffs might bring.”
As the clock ticks toward the Saturday deadline for the tariffs to take effect, and China vowing retaliatory tariffs, this game of economic brinkmanship begins. The question remains: Who will blink first?
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