President Donald Trump's tariff strategy is scheduled to take effect tomorrow, February 1: 25% on imports from Canada and Mexico, and 10% on Chinese imports.
Yale University Director of Economics Ernie Tedeschi, joins Market Domination to analyze the potential impact on American consumers. These tariffs would "translate to a 0.8% increase in the overall price level" for American households, resulting in approximately $1,300 in lost annual purchasing power, he explains to Julie Hyman and Josh Lipton.
"That's about half a year of normal inflation happening in one fell swoop," Tedeschi, the former chief economist for the Council of Economic Advisors (CEA) under the Biden administration, summarizes. He notes that while grocery prices would rise quickly, durable goods prices would "take some time" to reflect the increases.
Addressing the rationale behind the Trump administration's tariff stance, Tedeschi explains, "I think that he sees it as a way to protect domestic industry and as a way to raise revenue. The problem with that is those two goals are in conflict with one another."
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This post was written by Angel Smith