The Trump tariff policies, according to the economists

Economists, market scenes, and consumers alike are still trying to understand the effects of President Donald Trump’s announcement on Wednesday about The new customs duties are sweeping.

The plan, which is part of Trump’s “MAKEAKA Wealthy” initiatives again, is 10 % on all trading partners in the United States as well as duties of up to 50 % on countries with a trade deficit with them. Imports from China, South Korea and Japan, for example, the customs tariff faces 34 %, 25 % and 24 %, respectively. The European Union products will come with 20 %.

Investors’ reaction was quickly. S&P 500 – Agent for the stock market in the United States – ended – Thursday’s session with a decrease of 4.8 % and now sits more than 12 % lower than February height.

Head of Market Writers Anxiety: Economic Disorders. If other countries respond to the high Trump tariff by raising their own duties, the escalating conflict can develop into a commercial war by economists. It can slow global economic growth.

Since the customs tariff is collected from imported companies, economic experts say that the US-user companies that use foreign goods may likely pass at least some costs of customs tariffs to customers-a step that can govern inflation.

Here are what economists and market experts say.

Expect inflation, but not necessarily stagnation

If the customs tariff remains at the recently announced levels, the average rate of imports in the United States will rise to 18.8 %, up from 2.5 % in 2024, According to the estimates of the Tax Corporation.

But just because American companies are facing higher costs on imports that do not mean that they will have a suitable cost to consumers.

It is unlikely that consumers will feel the most complete increases, especially since companies realize that their customers are already financially extension, Jeffrey Roche, chief economist in LPL Financial, Tell CNBC recently his manufacture.

“in Economy weakness In general, consumers will be very sensitive to price changes, and I think companies will say: “We will eat some of this, and we may not be able to pass as much as they might think.”

However, expected some prices to rise – at least in the short term.

“The high definitions of inflation will cause 3 % to 5 % over the next year and a half from the United States without it,” says Bill Adams, the chief economist at Komerica Bank. With inflation He is currently sitting 2.8 % on an annual basisThis may mean an increase in percentage points this year (to 4.8 %), followed by one point in the next year, at the low end, he says.

Although re -heating of inflation can emphasize the economy, Adams and other economists believe that there is still room for growth, even with some opposite winds.

“It seems that the recession over the next 12 months is more likely than what was seen at the beginning of the year, but we still believe that the economy will likely expand in 2025 and 2026 in particular, because it seems that the administration will use tax revenues from the customs tariff to finance more partial tax cuts next year,” Adams says.

Expect the market in the short term

Old Wall Street says that markets do not hate more uncertainty. Although investors obtained their answer to the definitions that the administration will work on, the big questions remain about how these definitions develop over time, including possible high definitions from other countries.

Scott Helvistein, head of the Global X Investment Strategy.

Among the questions that investors will continue to look for answers: Will the definitions remain in place at the current levels? Some market experts do not think that.

“We expect the customs tariff to be reduced from the levels announced by the president,” wrote Mark Hevelli, the chief investment official of UBS Global Wealth Manegement, in a recent memo. “The president called himself the negotiations, and the Treasury Secretary said in an interview with Bloomberg that the declared definitions are” the end of the number “and that the two countries may take steps to drop the definitions.”

Do not expect them to shrink significantly. When asked if Trump could reverse the path, or whether this was a negotiation tactic, US Trade Minister Howard Lootnick was firm in his denial. “I don’t think there is any opportunity,” He said in an interview with CNN. “This is rearranging world trade, right? That’s what will happen.”

Some commercial partners may not prefer tactics, and some have already responded to their own tariff measures. China and the European Union, for example, it has Plans of economic anti -economic measures have already been announced.

In general, though, the economy was tearing the declaration of customs tariffs after showing some of the basic signs of power, including a The labor market is flexible And encouragement Companies profitsHilvistein says.

Even if things are shaken in the short term, the topics that were expected to push the market growth in the long run – such as the gains in artificial intelligence and automation – remain intact. Investors may be forced only to wait while sorting companies through tariff work strategies.

“These trends will continue – perhaps a little different road.”

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