“The rates are trying to make the United States again enrich the United States and make the United States again … they will be a bit of disturbance, we are not well that, it will not be much” – President Donald Trump in his speech on March 4, 2025 before a joint session of Congress
At this point you already know that the “reciprocal” rates of Trump’s April 2 were much more steep than expected. How steep? According to the analysis of the budget laboratory at Yale University, together with the previously announced rates, the US effective fee rate. UU. “Now is 22.5 percent, the highest since 1909”.
It is not a hyperbole to say that Trump rates of 2025 could fly decades of globalization and interrupt world trade in a significant way (and probable not a good).
Investors reacted to tariffs selling shares. In the two commercial sessions after the announcement, $ 6 billion were eliminated, much worse than “a bit of disturbance.”
Investors are concerned that when all US tariffs and retaliation enter into force and age through the economy, they will result in higher prices and slower growth, a precarious economic result that is called “stagnation” (steps or “asphalte growth)
The head economist of EY, Gregory Daco, estimates that if these rates remain in place, the highest cost of imports could point to the inflation rate by the end of the year, which would push the consumer price index.
“For the medium home, this would represent an annual loss of income or $ 690, while for families in the lower quintile, the loss would exceed $ 1,000.” The Center-Right Fiscal Foundation believes that the damage will be even worse, projecting that the tariffs “will reduce taxes after taxes by an average of 2.1% and amount to an average tax increase of more than $ 2,100 per HOME of the United States. UU. In 2025”.
To be clear, a tariff is not a real tax for consumers; Rather, it acts as one because it makes prices increase and, therefore, reduce the available income and consumer spending. As consumers face higher prices of fresh products, clothing, furniture and toys, not to mention large ticket items such as new and used cars, car parts, car insurance and appliances, can remove their expenses for other sakes from their expenses.
That is why the budget laboratory projects that the annual economic growth of 2025 will slow down for a drag, probably below one percent.
That is not a contraction, but given the volatile nature of situations along with nerve financial markets, the CEO of JP Morgan Chase, Jamie Dimon, warned in his annual letter of shareholders, that “recent tariffs will probably increase inflation and are the recession.” “
Before getting out of everything and running through the hills, remember that tariffs have a leg in the part again, out again and now again. If tariffs are really temporary, then the economic and market impact may not be so severe. But if we head to a recession, know that we have the leg there before.
According to the National Office of Economic Research, the organization responsible for declaring the principle and end of the recessions, there have been nine recesses since 1960. They are not pleasant, but if it is worried, try to disconnect noise and control.
That can mean conserving cash to ensure that you have 6-12 months of life expenses that are eliminated, especially if you are concerned with losing your job, paying a outstanding debt of high interest, and perhaps delaying anyone who were planning they were. Werle’s deceleration will affect you.
Jill Schlesinger, CFP, is a business analyst at CBS News. Former options and CIO merchant from an investment advice firm, welcomes comments and questions to askjill@jillonmoney.com. See the website at www.jillonmoney.com.