Portfolio Intelligence

How might tariffs affect U.S. growth and the Fed’s approach to rates?

Feb 7, 2025
In this engaging discussion, Alex Grassino, the global chief economist at Manulife Investment Management, shares insights into how tariffs shape economic landscapes. He elucidates the complex relationship between tariffs and inflation, debunking common myths. Alex discusses the short-term spikes in prices for consumers and businesses, as well as the long-term implications on global supply chains. He also addresses the uncertain nature of investment markets in response to tariffs, comparing it to a high-stakes poker game fraught with unpredictability.
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INSIGHT

Tariff Basics

  • Tariffs are taxes placed on imported goods, often to protect domestic industries.
  • They can also be used for national security reasons.
INSIGHT

Tariff Impact on Consumers and Businesses

  • Tariffs increase prices for consumers and businesses, but businesses may absorb some cost.
  • Long-term, prices might decrease as demand falls and consumers find substitutes.
INSIGHT

International Impact of Tariffs

  • Tariffs strain international trade, especially initially.
  • Supply chains and manufacturing locations may shift long-term.
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