President Donald Trump’s tariffs have had unexpected effects on the US economy, with the Producer Price Index (PPI) surging unexpectedly this week. While the PPI does not explicitly include tariffs, it shows how price increases are tied to the costs of increased tariffs.
Experts say that US businesses, particularly those importing goods, are bearing the cost of these tariffs. According to Alex Durante, senior economist at the Tax Foundation, “the evidence is pretty much clearly showing that it is the importer that is bearing the cost of the tariffs.” This is partly because foreign exporters are passing on tariff costs to consumers.
However, some businesses have found ways to split costs with producers. Stew Leonard, owner of a grocery store chain, said, “The cost has gone up for both of us… We don’t want to raise prices. We’re not trying to do it.”
New data shows that consumer sentiment declined 5% in August, the first downturn in 4 months. Despite this, credit card spending remains high, and income inequality is widening.
Source: https://www.scrippsnews.com/life/money/new-economic-indicators-show-the-costs-of-trumps-tariffs-are-creeping-into-americans-budgets