The United States President, Donald Trump, announced on Wednesday a new 10% tariff that will affect imports from 184 countries and territories. This tariff will be added to the existing customs duties, causing significant disruption in global trade.
Certain products, however, are currently exempt: oil, gas, copper, gold, silver, platinum, palladium, wood, semiconductors, pharmaceuticals, and minerals not found on American soil.
Steel, aluminum, and imported automobiles are also not affected by this new tariff as they are already subject to a 25% customs duty.
Canada and Mexico, operating under a different regime, are already facing new costs due to the trade war initiated by Trump.
From April 9, the tariffs for countries deemed particularly adversarial to free trade, especially those with significant trade surpluses with the United States, will increase.
Trump announced total tariffs of 54% for China, 20% for the European Union, 46% for Vietnam, and an additional 24% for Japan, affecting approximately 80 countries and territories.
The new tariffs from the Trump administration are expected to accelerate inflation and slow economic growth. The Federal Reserve’s focus will be to handle these temporary price increases, Federal Reserve Chairman Jerome Powell stated on Friday.
Powell noted in a written commentary that the tariffs and their economic and inflationary impacts are “significantly larger than expected.”
The chairman also remarked that import taxes are “highly likely” to lead to “at least a temporary increase in inflation,” though he added that “more persistent effects” are possible.
“Our obligation is […] to ensure a one-time increase in the price level does not become a continuous inflation problem,” Powell commented in Arlington, Virginia.
Powell’s focus on inflation implies that the Federal Reserve might maintain the interest rate at about 4.3% in the coming months.
Shortly before these remarks, Donald Trump urged the Fed chairman to lower interest rates in a Truth Social post.
“This would be the PERFECT time for Fed Chair Jerome Powell to cut interest rates,” wrote the Republican president, asserting that inflation has declined since he returned to power.
However, Powell also mentioned that it was “too soon” to adjust monetary policy.
Economists anticipate that the tariffs could weaken the economy, possibly threaten hiring, and drive up prices.
In this context, the Federal Reserve could cut rates to stimulate the economy or could maintain or even raise them to combat inflation.
