Economists Sound Alarm: U.S. Inflation Looms Despite Trump’s Trade Deals—Brace for Impact

Buckle up, America—your wallet’s about to take a hit.

Economists are flashing warning signs as inflation threatens to erode consumer spending power, regardless of past trade deal victories. The numbers don’t lie, and neither do the market jitters.

Trade wins? Cool. Now check your grocery bill.

Active inflation pressures are bypassing political wins, cutting straight to household budgets. Wage growth? Lagging. Prices? Climbing. The classic squeeze play—Wall Street’s favorite parlor trick.

Here’s the kicker: even ‘stable’ assets might not save you this time. (But hey, at least someone’s getting rich off volatility.)

Economists predict consumer prices will rise

Economists, however, warn that consumers may face steeper prices on everyday items later in the year, from leather accessories and apparel to gadgets and vehicles.

Capital Economics’ chief North America economist, Paul Ashworth, said, “Up to now, there has been only limited pass-through from tariffs into final consumer prices, but we still expect the impact to gradually mount in the second half of this year.”

He observed that many partners may be slapped with levies in the 15% to 20% range, while China could face steeper charges. He added, “We suspect retailers will be forced to finally raise the prices paid by consumers.”

Inflation at the start of 2025 stayed subdued, partly due to firms and consumers accelerating imports ahead of tougher tariffs. However, that cushion is projected to shrink as time passes.

Some sectors will feel tariff impacts more

Ernie Tedeschi, economics director at Yale’s Budget Lab, cautioned, “In the short term, sharply higher prices won’t show up evenly across all categories.” He noted that industries importing the largest volumes would see the most pronounced effects.

Yale’s research suggests that combining the 15% floor with additional, country-targeted tariffs could lift U.S. consumer prices by roughly 2% over two years. As Tedeschi emphasized, “This isn’t an instantaneous, ‘We wake up the next morning and the world is different.”

Once these elevated duties are integrated into global supply chains, certain categories could experience sharp spikes. Yale’s findings indicate that foreign-made leather footwear, bags and clothing might surge by 40% or more, with electronics costs rising over 20%.

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