The Organization for Economic Cooperation and Development (OECD) has issued a stark warning, indicating that the full impact of tariffs imposed during Donald Trump's presidency is yet to be fully realized within the United States economy. This assessment accompanies a downgrade in the OECD's growth forecast for the US, signaling growing concerns about the nation's economic trajectory.
The tariffs, initially implemented to protect domestic industries and address trade imbalances, have instead contributed to increased costs for businesses and consumers alike. Import duties on steel, aluminum, and a wide array of goods from countries like China have disrupted supply chains, forcing companies to absorb higher expenses or pass them on to consumers in the form of inflated prices. The OECD suggests that these inflationary pressures are proving more persistent than initially anticipated.
While the Trump administration argued that these tariffs would revitalize American manufacturing, critics contend that they have ultimately undermined competitiveness and hampered economic expansion. Several economists have pointed out that the tariffs have led to retaliatory measures from other countries, further disrupting international trade flows and harming US exporters. The Peterson Institute for International Economics, for example, has published research highlighting the significant economic costs associated with these trade policies.
The downgraded growth forecast reflects a broader concern about the US economy's ability to sustain its recovery in the face of these headwinds. Rising interest rates, coupled with persistent inflation and the lingering effects of the tariffs, are creating a challenging environment for businesses and consumers. The OECD's report emphasizes the need for policymakers to carefully consider the long-term consequences of trade policies and to adopt measures that promote sustainable and inclusive growth. Looking ahead, the OECD anticipates that the US economy will continue to face challenges related to trade and inflation, urging a more balanced approach to economic policy that prioritizes both domestic growth and international cooperation.
The tariffs, initially implemented to protect domestic industries and address trade imbalances, have instead contributed to increased costs for businesses and consumers alike. Import duties on steel, aluminum, and a wide array of goods from countries like China have disrupted supply chains, forcing companies to absorb higher expenses or pass them on to consumers in the form of inflated prices. The OECD suggests that these inflationary pressures are proving more persistent than initially anticipated.
While the Trump administration argued that these tariffs would revitalize American manufacturing, critics contend that they have ultimately undermined competitiveness and hampered economic expansion. Several economists have pointed out that the tariffs have led to retaliatory measures from other countries, further disrupting international trade flows and harming US exporters. The Peterson Institute for International Economics, for example, has published research highlighting the significant economic costs associated with these trade policies.
The downgraded growth forecast reflects a broader concern about the US economy's ability to sustain its recovery in the face of these headwinds. Rising interest rates, coupled with persistent inflation and the lingering effects of the tariffs, are creating a challenging environment for businesses and consumers. The OECD's report emphasizes the need for policymakers to carefully consider the long-term consequences of trade policies and to adopt measures that promote sustainable and inclusive growth. Looking ahead, the OECD anticipates that the US economy will continue to face challenges related to trade and inflation, urging a more balanced approach to economic policy that prioritizes both domestic growth and international cooperation.
Source: Economy | Original article