The global stock markets are reeling from the latest round of tariffs imposed by United States President Donald Trump, and are particularly concerned about the effects on consumer prices and the expectation of a possible economic slowdown. Apart from taxes on imported goods, the newly imposed tariffs will increase the price of foreign goods and services, which, according to Trump, will stimulate “buying local” and boost the economy.
However, the consequences tell a different tale.
While some domestic businesses may benefit from a temporary boost during the Trump administration due to less foreign competition, consumers are already mentally preparing for the increased prices on essentials like household and grocery items, as well as the numerous imported goods. Items ranging from electronics to daily use groceries may see a spike in prices, resulting in an overall increase in cost of living.
Trump’s newest tariffs also worsen already existing trade wars with China, which happens to be the largest trade partner of the United States. With retaliatory measures expected from both sides, world trade is expected to suffer even more. This poses a grave risk of these measures leading to a prolonged economic slowdown.
The economic impacts may also end up backfiring, and experts suggest that the measures are intended to provide some aid to United States based businesses, but as a result of these retaliatory measures the programs will cripple the economy somewhere down the road. Dire consequences are expected in the form of reduced economic growth, decreased investment confidence, and a blow to consumers—who will bear the brunt.
While this markets reevaluate and come up with new strategies, the existing strain on trade relations worsens the overall outlook; one pressing issue needing an answer right away comes to mind: Can the American consumer and government meet the added expenses generated by these tariffs?
