President Trump’s administration has implemented sweeping tariffs across the world, claiming that these import taxes will make America “great” and “rich,” making the country once again the “most respected country anywhere in the world.” However, the reality is proving to be different, as tariffs are sparking intense uncertainty in the U.S. and around the world. The effects of tariffs are starting to feel the effects, with inflation picking up and the labor market showing signs of cooling. The average cost of Trump’s tariffs to the American household would be $2,400 this year, with clothes and textiles likely to see the biggest effects. Experts believe the economy will get weaker, with higher inflation and slower job growth.
Despite the lower effective tariff rates, Trump’s tariffs are still at their highest levels since 1935. This may lead to a near-term reaction by foreign consumers against the U.S., akin to how Canadians retaliated against Trump’s tariffs by avoiding American products. However, there may be far-longer-term consequences that are hard to foresee, such as changing how countries view or are willing to interact with the U.S., eroding any trust or goodwill that America may have built up.
