How Trump’s New Tariffs Hit Just as US Economic Struggles Intensify

Tariff Changes and Their Impact on the Economy

Recently, President Trump introduced higher import taxes targeting over 60 countries and the European Union. Goods from these places now face tariffs of 10% or more. For items coming from Japan, South Korea, and the EU, the tax is 15%. Imports from Taiwan, Vietnam, and Bangladesh are taxed even higher at 20%. Trump believes this will prompt countries to invest significantly in the U.S.

However, there’s a growing concern about how these tariffs might harm the U.S. economy. John Silvia, an economic strategist, noted that as tariffs increased, hiring slowed down and inflation began to rise. “A less productive economy needs fewer workers,” he said, indicating that higher tariffs could translate to lower wages for many Americans.

Economists are worried this trend could lead to a slow and steady erosion of economic strength. Brad Jensen from Georgetown University warned that tariffs might create friction that slows down growth. The $582.7 billion trade deficit in the first half of the year was significantly higher than the year before, indicating that tariffs may not be working as intended.

The impact isn’t limited to the U.S. Germany, which exports 10% of its goods to the U.S., reported a 1.9% drop in industrial production due to the tariffs. Carsten Brzeski from ING said these tariffs are likely to dampen economic growth in Europe as well.

In India, new tariffs on imports could affect over half of the country’s shipments to the U.S. Exporters are feeling pressure, as margins are already slim. The Swiss government also recently faced significant tariffs that were the result of rapid negotiations in Washington.

Despite these issues, the stock market has remained relatively stable, with the S&P 500 climbing more than 25% since April. Some experts, like ING’s Brzeski, caution that while markets might seem unaffected, the long-term consequences of tariffs could unfold slowly and impact economies over time.

Rachel West, a labor policy expert, expressed that while Trump seems unconcerned with the ongoing uncertainty, everyday Americans are already feeling the effects.

In conclusion, as the U.S. navigates these changes, both domestic and global markets wait anxiously to see how this will all play out.

For more detailed coverage on tariffs and their effects, you can visit AP News.

Source link

International trade, Donald Trump, Paul Ryan, Europe, Financial markets, European Union, Japan, South Korea, General news, Asia Pacific, Tariffs and global trade, John Silvia, Carsten Brzeski, Washington news, Trump Media Technology Group, U.S. news, Rachel West, Politics, Asia, Business, Switzerland government, World news, U.S. News, World News