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President-elect Donald Trump said he would implement tariffs on imported goods.Economists said the proposals could boost inflation and raise prices for consumers.The Federal Reserve would likely respond to inflation by raising interest rates to curb demand.
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One of the first policies President-elect Donald Trump is expected to enact after being sworn into office is imposing taxes on imported goods.Many economists say these tariffs, as well as some of his other proposals, could kick-start another bout of inflation and interest-rate hikes.Trump has said that his proposals would not impact US prices. “I am going to put tariffs on other countries coming into our country, and that has nothing to do with taxes to us. That is a tax on another country,” he said in an August speech.Some experts have argued otherwise. Economists and investors project that taxes imposed on imports will be passed on to American consumers in the form of higher prices. In an economic chain reaction, households would then pay higher interest rates on borrowing of all kinds as the Fed moves to tame that newly rekindled inflation.
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Ramping up tariffs from Trump’s first term is expected to eat into Americans’ walletsOn the campaign trail, one of Trump’s cornerstone proposals was a 60% tariff on goods imported from China and a 10% to 20% tariff on imports from other countries.
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The US Census Bureau reported that broad tariffs would likely affect the prices of automobiles, drugs for human and veterinary use, food and beverages, furniture, and household appliances.Trump could announce these changes as soon as he takes office because they would not require congressional approval, but because implementation could take time, consumers would not see higher prices immediately.An analysis from the nonpartisan Peterson Institute examined Trump’s proposed 60% tariff on goods imported from China and estimated that it w …
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