“The proposed tariff plan, if implemented, is expected to slow economic growth in the short term, increase consumer prices, production factor costs, and reduce household wealth,” stated DBRS Morningstar in a press release.
Additionally, companies are likely to hesitate in making significant investments.
U.S. President Donald Trump announced on Wednesday the implementation of a global base tariff of 10% on all countries deemed to be creating trade barriers against American products. This includes an additional tariff for those considered to be the “worst offenders.”
A 20% tariff will be applied to all imports from the European Union.
The agency warned that the repercussions of this tariff plan will be felt globally.
“If the primary goal of the [Trump] administration is to relocate production and strengthen domestic manufacturing, these tariffs might remain in place for a considerable period,” it argued, noting that political uncertainty will persist, increasing costs and protectionism.
