The most recent increase in tariffs by President Donald Trump has rattled global stock markets, resulting in a steep decline in their value and an intensified concern regarding inflation and slowing economic growth. By trying to promote U.S. manufacturing and lessening the reliance on foreign goods, these tariffs are intended to make imported products more expensive.
Even though some domestic industries might benefit from the changes in the short-term, the overall effect is negative. The consequences are being felt by the consumers who are paying more for their everyday goods such as electronics and household products as the tariffs raise prices on these goods, functioning as an additional tax.
Renewed tensions with China have the potential to damage already fragile global supply chains, increasing the risk of economic stagnation. With rising uncertainty, trust from the investors gets eroded leading to the increased risk of recession.
Amid John Maynard Keynes’s concept of economic nationalism to free trade, it appears that businesses could have an upper hand—while in the end it is the consumers who must pay the price.