Recent tariffs proposed by former President Donald Trump have raised concerns among experts about their potential impact on the US economy.
Trump's New Tariffs
The tariffs include a 10% baseline duty along with additional double-digit tariffs on goods from key trading partners. The overall tariff rate on imports into the US will rise to 22%, a significant increase from the 2.5% seen last year.
Economic and Consumer Reactions
Financial markets reacted swiftly, with the US dollar falling 1.7% against a basket of currencies from key trading partners. The new tariffs are expected to affect the economy through various channels. While companies may not fully pass on the cost increase to consumers, most American households will likely feel the impact. Research shows that during Trump's trade war, about 60% of a temporary 20% tariff on imported washing machines was passed on to consumers.
Expert Predictions and Opinions
Economists predict that the new tariff package could add approximately $1,350 in additional costs for every American. Some experts emphasize that the chance of a US recession over the next 12 months has significantly increased. For instance, Marc Giannoni from Barclays expects core consumer price inflation to exceed 4% this year, with the unemployment rate rising to 4.6% by the fourth quarter.
Thus, Trump's new tariffs present a substantial challenge for the US economy, and many analysts foresee negative consequences for consumers and the labor market.
