Generative AI and Tariffs: The Impact on Jobs and the Economy.

Generative AI and tariffs are affecting the labor market and US services. Recent college graduates, especially females in healthcare and education, are experiencing high unemployment due to AI adoption. Tariffs have been imposed, but their effects are not as dramatic as predicted. CEOs and large companies are adapting to tariffs and embracing AI opportunities.

The arrival of generative AI and the imposition of tariffs are significantly impacting the U.S. labor market and services sector. According to a Goldman Sachs economist, Joseph Briggs, changes brought by generative AI are already evident in employment data, particularly affecting younger tech workers [1].

The technology sector has seen a hiring pullback, with unemployment rates among tech workers aged 20 to 30 jumping by 3 percentage points since the start of this year [1]. This trend is likely due to AI's increasing ability to handle routine tasks, potentially leading to job displacement for younger workers. Briggs co-authored a report that suggests roughly 6% to 7% of all workers could lose their jobs due to AI-related automation in a baseline scenario [1].

Meanwhile, Google has announced a $1 billion commitment to provide AI education and job training tools to U.S. colleges and universities [2]. This initiative aims to help future professionals become fluent in AI, a skill increasingly essential for career success. The push comes as major tech companies like Microsoft and Meta compete for dominance in the AI space, and some corporate leaders predict that AI could trim their human workforce due to productivity gains [2].

The U.S. trade deficit narrowed in June, with the trade gap with China shrinking to its lowest in more than 21 years [3]. While tariffs have had some impact, their effects have not been as dramatic as initially predicted. Businesses are adjusting to the reality of higher tariff rates, which are now estimated to be at an average of 18.3%, the highest since 1934 [3]. Despite the tariffs, the services sector has been affected, with businesses finding it more challenging to plan due to increased costs [3].

CEOs and large companies are adapting to these changes. While tariffs are impacting business planning, they are also embracing opportunities presented by AI. For instance, Google's AI education initiative underscores the industry's focus on preparing the workforce for AI-driven changes [2].

In conclusion, generative AI and tariffs are reshaping the U.S. labor market and services sector. While younger tech workers are experiencing higher unemployment rates due to AI adoption, initiatives like Google's AI education program aim to mitigate these impacts. Meanwhile, businesses are adjusting to the reality of higher tariffs and embracing AI opportunities.

References:
[1] https://www.cnbc.com/2025/08/05/ai-labor-market-young-tech-workers-goldman-economist.html
[2] https://www.cbsnews.com/news/google-ai-education-college-job-training-1-billion/
[3] https://www.staradvertiser.com/2025/08/05/breaking-news/u-s-trade-deficit-hits-2-year-low-as-tariffs-squeeze-services-sector/