'T-shirts could be the new eggs': Why Trump's chaotic tariff whipsaw is still a huge threat to inflation

Key Points

  • Inflation slowed last month, but new tariffs on China could trigger price hikes.
  • The US average effective tariff rate has risen to 27%, the highest since 1903.
  • Economists warn of potential increases in consumer prices due to supply chain disruptions.
  • The latest CPI data showed a decrease in monthly prices, but future inflation risks remain due to tariffs.

Summary

The article discusses the recent economic developments concerning inflation and tariffs in the U.S. Despite a slowdown in inflation last month, the looming threat of new tariffs on China, as part of President Trump's ongoing trade war, could lead to another wave of price increases. The White House confirmed that China's total tariff rate is now 145%, pushing the U.S. average effective tariff rate to 27%, the highest since 1903. This increase could result in higher consumer prices, with economists like Claudia Sahm suggesting that everyday items like T-shirts might see price hikes similar to those experienced with eggs. Although the latest CPI data showed a decrease in monthly prices, the future looks uncertain with potential tariff-induced inflation on the horizon. The Federal Reserve remains cautious, with Chair Jerome Powell indicating a wait-and-see approach to monetary policy adjustments amidst these economic uncertainties.

yahoo
April 11, 2025
Stocks
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