It may seem like just about every day there’s news from President Donald Trump’s administration about tariffs and deals. Trump has said those tariffs on other countries are needed to help the American economy.
Since it can be confusing to understand how those tariffs may impact everyday consumers, Noah Yosif, chief economist at the American Staffing Association, shared his analysis of what’s happening and what it means for many Americans.
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Why So Many Changes?
You may be wondering why the tariffs have been changing so often. According to Yosif, a former economist with the Bureau of Labor Statistics, and Toby Malara, vice president of government relations at the American Staffing Association, one big reason is that the tariffs involve many different parties.
“We’re witnessing real-time, public negotiations between the Trump administration and other governments,” Malara said. “The types of adjustments and policy movements we’re seeing are the results of fluid discussions and deals happening with countries throughout the world.”
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How Will Tariffs Impact Consumers?
To put it simply, Yosif said the jury is still out on whether the economy will be able to absorb potential shock from tariffs.
“Tariffs are a financial penalty on businesses, usually transferred onto consumers, for buying products from abroad,” Yosif said. “Consumers will feel the pinch when they buy everyday products subject to the tariffs, and after the Fed raises interest rates to quell the consequent rise in inflation.”
Meanwhile, per Yosif, the fervent frontloading of imported goods by businesses last quarter has spared consumers from larger markups until later in the year.
“With tariffs largely affecting intermediate purchases incorporated within domestically produced goods, consumers are likely to see a gradual uptick in prices as businesses adjust their supply chains to the new realities of global trade policy,” Yosif said.
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Sources
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Noah Yosif and Toby Malara, American Staffing Association
This article originally appeared on GOBankingRates.com: I’m an Economist: This Is Why Trump’s Tariffs Change So Often and What That Means for Your Money