The Hidden Mental Health Cost of The Tariff War 2025

26 October 2025

Deeply engrossed in the recent tariff war? I plead guilty! 2025 has been a year of 100% Drama and 100% tariffs. But beyond the economy, are you aware of the toll these tariffs are taking on the community's mental health? Wait till you find out the hidden cost.

The benefits of a tariff are visible. Union workers can see they are "protected". The harm which a tariff does is invisible. It's spread widely.

-Milton Friedman

KEY TAKEAWAYS

Tariffs create economic stressors like inflation and job insecurity.
These stressors are direct psychological triggers for anxiety and depression.
Financial instability traps people in a cycle of poor mental and economic health.
This widespread distress harms the entire community's overall well-being.
Vulnerable groups face the most severe psychological burden with the least access to care.

On April 2, 2025, President Donald Trump imposed “reciprocal” tariffs on various countries, including key economic partners like the European Union, India, and China. These tariffs came as a headshot to the world economy. In earlier times, tariffs were used to collect revenue; now, the whole idea behind the recent tariffs is to protect and promote the domestic industries. However, this core idea is quite flawed, as highlighted by economists. In this article, we will briefly look at these critiques; furthermore, most importantly, we will understand the psychological threats it pose to the communities.

The Critique by Economists

The two major criticisms by the economists at the community level are, firstly, the high cost burden on the people, and secondly, the impact it has on the job market. Critics argue that the tariffs will directly or indirectly increase the cost of all products, whether imported or domestic, which will be borne by the common people of the country. This price pressure translates into a significant and quantifiable burden on households, effectively reducing their real income and purchasing power.

Another concern raised is the increased risk of lay-offs and unemployment. Data from 2025 shows this effect in action, with the manufacturing sector shedding 42,000 jobs in the months following new tariff announcements. Retaliatory tariffs amplify this domestic job loss. When the U.S. imposes duties, trading partners respond with their own tariffs, targeting key American exports, particularly agricultural products such as soybeans, pork, and corn. This retaliation slashes foreign demand, depresses domestic prices, and causes job losses in the agriculture, transportation, and warehousing sectors.

The Psychological Cost of Tariffs

Inflation and Job insecurity act as a psychological trigger. Research has well established that Job insecurity is as harmful as the actual job loss for mental well-being. Financial stress is often attributed to the activation of physiological stress responses in the body. These high levels of cortisol lead to depression, anxiety, and several other mental disorders, which often even push an individual into the vicious cycle of substance abuse.

All these factors compound to get an individual in a mental-health trap, where the financial instability causes mental instability, which further worsens the economic conditions. Thus, we can be certain that the recent tariffs will take a toll on the mental well-being of individuals, ultimately harming the community's overall well-being.

Impact on Vulnerable Communities

The psychological impacts of the tariffs are unequally distributed among communities. The marginalized communities and those in lower socio-economic status pay an unfair price due to the increased costs of living and job insecurities. Low-income households have fewer financial reserves, so a price increase on essential goods can be a crisis, not just an inconvenience. They are further pulled into the dungeons of complete darkness in the context of mental well-being due to the inaccessibility to professional care.

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