US President Donald Trump has signed executive orders to impose 25% import duties on all steel and aluminum imports, sparking concerns that consumers will bear the brunt of the increased costs. Economists warn that tariffs could lead to higher prices for goods like vehicles and appliances.
The tariffs, which affect around $50 billion in imports, are intended to protect US manufacturers from unfair competition. However, experts say that consumers may end up paying more due to the increased costs. A typical car contains around 1,000 pounds of steel at a cost of $6,000 to $7,000, and adding a 25% tariff could increase the price by $1,000 to $1,500.
The new tariffs are also expected to drive up inflation, with Deutsche Bank economists estimating that they could boost the core personal consumption expenditures price index by an additional 0.4 percentage points. If implemented, the postponed tariffs on imports from Mexico and Canada could raise inflation even higher, potentially exceeding 3.5%.
Experts note that while tariffs may incentivize greater domestic production in the long term, there is uncertainty about their impact on US prices. The Federal Reserve has paused interest rate cuts until the rate of consumer price gains falls closer to its 2% annual target.
The move comes as Trump signals plans to announce “reciprocal tariffs” on Tuesday or Wednesday, which would impose import duties on products in cases where another country has levied duties on US goods. Economists warn that these new tariffs could cause inflation to flare even if many Americans continue struggling with the cost of living.
Source: https://www.cbsnews.com/news/trump-tariffs-steel-aluminum-25-percent-impact-prices-inflation