The stock market seems unfazed by President Donald Trump’s tariffs on Canada and Mexico, but economists warn that this complacency may be misplaced. Despite the chaos surrounding the trade wars, markets are humming along, focusing on the latest jobs report and inflation numbers.
However, experts say that the threat of tariffs is still real, even if it doesn’t seem to be having an immediate impact on the market. According to economist Claudia Sahm, talking about tariffs can stoke inflation, which could lead to higher prices for consumers.
Consumers are also expressing skepticism about Trump’s intentions, with a recent survey showing that many expect inflation to rise over the next five years. This suggests that Americans believe the president isn’t bluffing, and that they may be taking the potential costs of tariffs seriously.
The “so what” in this debate is not whether markets are reacting to the tariffs, but rather how the chaos surrounding them affects the economy. As one industry CEO noted, “Nobody knows what’s up,” suggesting a sense of uncertainty and confusion. This sentiment reflects the complexities of Trump’s trade agenda and its potential consequences.
While the market may be ignoring the tariffs for now, economists warn that this complacency could be misplaced. The real-world impact of these policies will likely become more apparent in the coming months, making it essential to take a closer look at the data and economic trends shaping our economy.
Source: https://edition.cnn.com/2025/02/11/business/trump-tariffs-inflation-nightcap/index.html