The era of tariffs has officially begun in the US. After delays and adjustments, most of President Trump’s tariffs have kicked in, imposing a 15% rate on most countries, with some, like India, facing much higher import taxes.
According to Yale University’s Budget Lab, the average tariff rate for the US is now 18.6%, the highest since 1933. This increase will likely lead to higher prices for goods and services in the country.
While shoppers have not yet felt the full effects of the tariffs, companies such as General Motors are absorbing most of the costs. However, this can’t last, and companies will eventually need to pass on these expenses to consumers through price hikes.
The impact on consumer prices is uncertain, with estimates suggesting that clothing and textiles may see significant price increases, potentially rising 39%. However, the exact cost of tariffs for households remains estimated at $2,400 per year.
Inflation is expected to rise, but at a slower rate than in 2022. The unemployment rate has ticked up slightly, but still remains historically low. Economists expect hiring to slow this year due to higher tariff costs and cautious investment.
Most forecasters do not expect a recession, despite concerns about growth. The stock market has surged recently, driven by investors’ optimism that the US economy can withstand Trump’s tariffs.
However, it’s clear that all parties will feel the effects of the tariffs, from businesses to households. As inflation rises and consumer prices increase, consumers may become more cautious in their spending habits, leading to a ripple effect on the entire economy.
Source: https://www.npr.org/2025/08/09/nx-s1-5496262/trump-tariffs-economy-inflation