Trump’s Tariff Effect
Trump’s tariffs have far-reaching effects on the global economy, not only on import-export but also on consumer prices, supply chains, and geopolitical dynamics. Impacts include:
Inflation and Imported Product Prices Rise
Tariffs make imported goods more expensive, and these additional costs are often passed on to consumers through higher prices. This can accelerate domestic inflation in the US as well as in trading partner countries.
Business Uncertainty and Disrupted Supply Chain
Companies that depend on imported components will have to adjust their supply and production strategies, which could lead to higher operating costs and delayed investments.
Onset of Retaliation from Other Countries
Countries hit by tariffs often impose retaliatory tariffs on US products. This could trigger a prolonged trade war and slow global trade.
Macroeconomically, tariffs can also slow down economic growth as consumption and investment become more cautious amid tariff uncertainty.
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