The Budget Lab at Yale has released a new analysis predicting that President Trump’s tariff war could increase prices by 1.8% in the short term, potentially costing the average American household about $2,400. The nonpartisan think tank found that consumers faced an overall effective tariff rate of 18.6%, the highest in nearly a century. Adjusting for changes in consumer preference due to the tariffs, the overall effective tariff rate would be 17.7%, still the highest since 1934. The new tariffs include a 50% levy on India, Laos, Switzerland, and Iraq, with low-income households expected to feel the costs more than high-income counterparts. In the long run, automobile prices could rise nearly 10%, equivalent to about $4,500 added to the price tag of a new car in 2024. Food prices could be impacted to a lesser extent, with a projected 3.2% short-term increase before stabilizing at 2.9% higher in the long run.
The analysis indicates that a trade war is expected to increase prices by 1.8% in the short term. Huong membership 006-2023
