Customs, trade war inflation has a “pretty ugly” effect until summer

The effects of President Donald Trump’s tariff agenda and the resulting trade war will lead to higher consumer prices until summer, economists said.

“I suspect until May – certainly until June, July – the inflation statistics will look pretty ugly,” said Mark Zandi, chief economist at Moody’s.

Customs are a tax on imports paid by US companies. According to economists, importers pass on at least some of these higher costs for consumers.

While economists are discussing whether tariffs will be a one -time price shock or a little more persistent, there are hardly any arguments that affect consumers.

According to a tariff guideline announced until Wednesday, which was announced by Wednesday, consumers will lose 4,400 US dollars in buying analysis in “short -term”. (There is no time frame.)

The Federal Inflation Data does not yet show many tariff effects, said economists.

In fact, the ghost of a global trade war may have had a “positive” influence on inflation in March in a “dark ironic” way, said Zandi. Oil prices have withdrawn in view of the fear of global recession (and the resulting deposit of the oil requirement), a dynamic that filtered at lower energy prices, he said.

“I think it will take some time before the inflation shock goes into the system,” said Preston Caldwell, head of the US economist at Morningstar. “First (inflation data) could look better than it will be at some point.”

However, consumers will see significantly higher prices by May if the President maintains collective bargaining policy, said Thomas Ryan, economist in capital economy.

“Price increases need time to filter through the supply chain (starting with producers, then retailers/wholesale and finally consumers),” wrote Ryan in an email.

Capital Economics expects the consumer price index in 2025 to have a highlight of around 4% and 2.4% in March. This highlight would be about twice as high as the Federal Reserve that aims in the long term.

The food will probably be one of the first categories to increase prices, said Zandi.

Since many foods are perishable, food dealers cannot offer very long. This accelerates higher costs for consumers, he said.

In comparison, other retailers can sell an old inventory that sits in their warehouses that were not exposed to the tariffs, said economists. This dynamic would delay the price effects for consumers, economists said.

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It is expected that most physical goods such as vehicles, consumer electronics, clothing and furniture at the memorial day are more expensive, said Zandi.

In addition, retailers and wholesalers don’t want to do everything at once, “said Ryan.

You will probably sprinkle higher prices over time to stump the counter -reaction of consumers, said Ryan. Consumer prices “will reflect more in May and beyond the real effects of tariffs,” he said.

There is also the possibility that some companies could try to meet the effects of tariffs by increasing the prices to expect higher costs, said Ryan.

However, it would be a gambling for companies to do this, said Caldwell.

“Every company that first cuts out its neck and increases prices will probably be subject to political boycotts and unfavorable attention,” he said. “I think companies will move quite slowly at first.”

There is sufficient uncertainty about the ultimate scope of President Trump’s tariff policy, economists said.

Trump held dozens of trading partners on Wednesday to impose strong tariffs. Kevin Hassett, director of the National Economic Council, said on Thursday that 15 countries had made trade agreements.

At the moment, all US trading partners are still exposed to imports with a universal tariff of 10%. The exceptions – Canada, China and Mexico – are exposed to separate taxes. For example, Trump has delivered a fee of 145% to goods from China, which makes up a “de -facto -embargo”, said Caldwell.

Trump has also imposed product -specific tariffs on aluminum, steel, automobiles and auto parts.

There is a possibility that prices for services such as travel and entertainment could fall if other nations could be relativized with their own trade restrictions in relativizing or less foreign demand, said Zandi.

In March there were some indications: “Steen” decline in hotel prices and flight prices in the CPI data in March, according to a Thursday from the capital economy, reflect the latest decline in tourist visits in the USA, especially from Canada.