The CBO estimates that a permanent 60% tariff on Chinese imports and a 10% tariff on all other goods would initially raise consumer prices significantly, increasing inflation by a full point by 2026. However, the impact on prices would not continue to rise after that period, as the tariffs would no longer have additional significant effects on overall pricing dynamics.
Poorer households are anticipated to be the most affected by these tariffs, as they spend a higher proportion of their income on consumer goods, resulting in a substantial drop in purchasing power that could deepen economic inequality.
While the tariffs are projected to lower GDP by up to 0.6% over the next decade, potential offsets might emerge as consumers shift toward domestically produced goods, thereby mitigating some of the negative impacts on economic growth.
Despite initial concerns about growth, the CBO forecasts that the tariffs could reduce the budget deficit by as much as $2.7 trillion over the next 10 years, which could create opportunities for private investment and soften the overall drag the tariffs could have on the economy.
Collection
[
|
...
]