US tariffs have had mixed effects on the country’s economy since their introduction in 2019. After a sharp decline in the stock market, shares have rebounded, with the S&P 500 index increasing by about 6% for the year. However, some industries, such as retailers and car manufacturers, continue to feel the pinch.
The US stock market initially suffered the most when Trump announced his tariffs plans in April. The S&P 500 index dropped around 12% over a week, but it has since recovered. The White House has left its options open regarding the talks deadline, stating that it’s “not critical” and may present other countries with a deal.
Despite the initial volatility, trade data shows an increase of 17% in US goods imports during the first five months of the year compared to the same period last year. However, experts warn that if the tariff freeze ends and high tariffs are reimposed, there’s a risk of a short recession.
The impact on prices is unclear, with some items seeing larger jumps due to higher duties. Firms may choose to pass these increases on gradually rather than abruptly affecting customer spending. Economists predict customers will eventually pay for the increased costs.
Consumer spending has slowed down, with retail sales dropping 0.9% from April to May. However, the job market remains strong, with low unemployment rates and steady job creation. The economy is expected to continue growing, but at a slower rate than previously thought.
Overall, while Trump’s tariffs have had some negative effects on certain industries, the US economy appears to be holding up better than expected. Nevertheless, there’s still uncertainty surrounding the future of trade policies, which could impact the country’s growth prospects.
Source: https://www.bbc.com/news/articles/c4gkxkq21nwo