Trump’s massive import taxes haven’t done much economic damage — yet
Article By: PAUL WISEMAN, CHRISTOPHER RUGABER and ANNE D’INNOCENZIO, Associated Press Business Writers
WASHINGTON (AP) — Despite warnings of price increases and economic harm from President Trump’s tariffs, recent economic reports show a different picture: Inflation eased last month, and April saw solid hiring. This apparent disconnect has left businesses and consumers trying to make sense of conflicting expectations, data, and real-world observations.
While the trade wars of Trump’s first term did not result in widespread inflation, economists caution against complacency. The unpredictability of Trump’s tariffs, which are at their highest levels since the Great Depression, remains a concern. The impact of these tariffs is still unfolding and could have significant repercussions.
Although the recent truce with China has lessened some risks to the U.S. economy, the fallout from Trump’s trade policies is expected to be substantial. The Yale Budget Lab estimates that the average U.S. household will see a reduction in purchasing power due to climbing prices, particularly for items like shoes and clothing. The tariffs are projected to slow economic growth and increase the unemployment rate.
Trump’s imposition of tariffs on imports from various countries has raised the average U.S. tariff rate significantly. The full effect of these tariffs has yet to be felt, as companies rushed to import goods before the tariffs took effect. However, the delayed impact is expected to materialize in the coming months.
Consumers, who are still recovering from the pandemic-induced inflation, may be less willing to accept price hikes resulting from tariffs. Companies are also absorbing some of the tariff costs, leading to lower profit margins. Despite Trump’s insistence that foreign countries bear the burden of tariffs, the reality is more complex, with businesses and consumers likely facing higher prices.
As uncertainties loom over the future of tariffs, consumer confidence has declined, and businesses are grappling with the financial implications. From coffee roasters to holiday décor suppliers, companies are navigating the challenges posed by tariffs and striving to mitigate their impact.
D’Innocenzio reported from New York.
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