Audio Briefs Economic Consequences of “Liberation Day” Tariffs
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Apr 16, 2025 Explore the economic fallout from new import tariffs implemented by the Trump administration. Discover how these tariffs could impact U.S. GDP, wages, and prices in different sectors. Learn about projections indicating potential declines in both U.S. and foreign GDP, driven by shifting trade dynamics and evolving consumer behavior. The discussion sheds light on the broader implications for the economy and market intricacies.
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Historic Rise in US Tariffs
- The average U.S. import tariff would rise nearly tenfold to 17% if all proposed tariffs are implemented.
- This level has not been seen since the 1910s, representing a major shift in U.S. trade policy.
Tariffs Lower GDP, Raise Prices
- The proposed tariffs would reduce U.S. imports by 11% on average and decrease U.S. GDP by 0.8%.
- Prices in the U.S. would rise by 7.1%, wages by 6.3%, resulting in a drop in real wages despite nominal wage increases.
Global Economic Impact of Tariffs
- The tariffs would cause a $240 billion annual output loss to the U.S. economy.
- They would also cause GDP declines in foreign countries, especially Canada and Mexico, with declines greater than 0.8%.