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Economists Warn of Price Hikes Following New Tariffs
As President Trump’s sweeping tariffs take effect, the nation is bracing itself for a possible economic downturn. According to trade experts, the move will likely lead to a negative impact on companies’ bottom lines and cause consumer prices to rise.
In a stark warning, economists predict that the new duties on imports from dozens of U.S. trade partners will result in even more dramatic cost increases for American businesses and consumers alike. The devastating effects are already being felt, with major corporations announcing significant profit drops due to Mr. Trump’s foreign trade policies.
The automotive sector is particularly affected, with Toyota, the world’s largest auto maker, reporting a 37% drop in profit during the April-June quarter. The company has also reduced its full-year earnings forecast primarily as a result of the new levies. Other major players in the industry have echoed similar sentiments, predicting significant losses due to the tariffs.
Meanwhile, companies in the consumer electronics and liquor industries are also feeling the pinch. Sonos, a popular speaker manufacturer, has announced that it will raise prices on its devices due to increased reciprocal tariffs on Vietnam and Malaysia, where some of its products are manufactured for the U.S. market.
In light of these developments, experts warn that Americans should prepare for a tsunami of price hike announcements from major corporations. Some businesses have already begun warning consumers of impending price increases, citing the added costs stemming from the new tariffs as the primary reason.
As a result of these levies, the average tariff rate has skyrocketed to around 18%, the highest level seen in decades. Economists are concerned that this development will only exacerbate inflationary pressure and lead to a more pronounced erosion of consumer spending as households struggle with higher prices.
It remains to be seen whether President Trump’s tariffs will indeed result in the predicted negative economic impact. However, it is clear that companies are already feeling the effects of these measures, and economists are sounding the alarm on impending price hikes.
Will you pay attention
Source: www.cbsnews.com
