Experts Debate Impact of U S Tariffs on Consumers

Commerce Secretary Howard Lutnick has vigorously defended President Trump's widespread import tariffs, asserting the U.S. is now collecting "more than $30 billion a month" from the 10% global tariffs implemented, while controversially insisting that consumers won't see price increases at this particular tariff level. 🇺🇸💰📈

Lutnick's Core Arguments:

He claims that for tariffs below 15% (like the general 10% rate), the majority of the costs are absorbed by foreign nations and currency fluctuations, rather than being passed directly to American consumers. He cited Amazon's latest earnings report (showing no changes in consumer demand or pricing despite tariffs) as evidence.
He dismissed concerns from credit rating agencies (like Moody's recent U.S. credit downgrade) and critiques of Congressional Budget Office deficit projections, arguing they fail to adequately account for this new stream of tariff revenue. Lutnick views the tariffs as negotiating leverage.
Economists Widely Dispute No-Price-Hike Claim:

💸 Research from institutions like the Federal Reserve Bank of Atlanta indicates that tariff scenarios like the current 10% global rate could raise prices on everyday retail purchases by 0.81% to 1.63%.
💸 Studies on previous tariffs (e.g., by J.P. Morgan economists) found a "nearly one-for-one rise in import prices, much of which was passed onto consumers," often within a month of enactment.
💸 The general economic consensus is that tariffs primarily function as a tax on imports that is typically borne by "domestic sellers and consumers, not foreign producers."
This debate is occurring as the U.S. also navigates the impact of much steeper tariffs on specific countries, like the ~145% effective rate on many Chinese imports (implemented in stages since April 2025), where price impacts are more widely anticipated.

The differing views highlight a significant disconnect between the administration's portrayal of who bears the cost of tariffs and the analyses of many economic experts, with ongoing implications for U.S. households and businesses. 🤔🚫💸

#Tariffs #TradeWar #Trump

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