Tariffs Impacting U.S. Businesses: What You Need to Know
Tariffs on imports have hit midsized U.S. businesses hard, with costs tripling over the last year. A recent study by the JPMorgan Chase Institute highlighted this shift, revealing that many companies now face higher expenses due to these taxes.
These businesses, employing around 48 million workers, are trying to navigate this change. They may pass on these costs to customers by raising prices, cutting jobs, or accepting smaller profits. Chi Mac, a business research director at JPMorgan Chase, noted, “That’s a significant change in their cost of doing business.” Interestingly, the analysis also suggests that some companies are shifting their supply chains away from China, potentially moving to other Asian countries.
What do the numbers say? Payments from these midsized businesses to China are down 20% compared to previous levels. However, it’s still unclear whether this means they’re sourcing goods from other countries or simply rerouting shipments through different paths.
Despite these findings, the White House remains firm in its belief that tariffs benefit the economy. They argue that these tariffs are meant to level the playing field and reduce the trade deficit. Yet, recent data from the Census Bureau shows the trade gap actually widened by $25.5 billion last year, reaching $1.24 trillion.
Kevin Hassett, director of the White House National Economic Council, dismissed opposing research that shows U.S. consumers and companies bear most of the tariff burden. He criticized a report from the New York Federal Reserve that indicates nearly 90% of the tariffs are shouldered by Americans.
Historically, President Trump raised the average tariff rate significantly from 2.6% to 13%. He claimed this was necessary for national security and bypassed Congress to implement many tariffs, calling this move “Liberation Day.”
Though inflation has not soared under his watch, many voters feel the pinch of rising costs. A team of academic economists estimates that consumer prices are about 0.8 percentage points higher due to these tariffs.
As businesses continue to adjust, there’s a growing need to watch how these policies shape our economy and global trade dynamics. The conversation about tariffs isn’t just about numbers; it’s about the real impact on workers and consumers across the country.
For more insights on the economic implications of tariffs, you can explore the findings from the New York Federal Reserve.
Source link
Donald Trump, International trade, Kevin Hassett, China, New York, General news, Asia Pacific, Tariffs and global trade, Business, United States government, Asia, Economic policy, Washington news
