In just a few months, President Donald Trump raised the average tariffs imposed by the United States on the rest of the world from 2.5% to around 17%, according to the current state of negotiations. Uncertainty remains high, but the first effects of this economic shock have begun to materialize. Gilles Moëc, chief economist for the AXA insurance group, analyzes what is happening.
It has been four months since the tariffs promised by Donald Trump have started to be implemented. So far, who is actually paying for them?
It’s the Americans, but we do not yet know exactly which ones. It is still too early to say for certain, because companies prepared extensively: They built up inventories ahead of time, in the first quarter, and are now running them down, so we do not yet see much in the statistics. However, we do have US import prices through June. If exporters to the United States were absorbing much of the shock, we would expect to see a drop in prices. That is not the case. Prices for imports from Canada, for example, rose by 0.3% between January and June; those from the European Union rose by 1.4%. There is one exception: prices for imports from China, which fell by 1.6%, but that is relatively modest.
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