Trump’s Tariffs: Big Shock, Small Fallout

When President Donald Trump introduced the steepest U.S. tariffs in nearly a century last April, economists sounded alarms about runaway inflation and an impending recession. Six months later, those predictions haven’t come true. Inflation remains above target but lower than expected, and the economy continues to grow. According to the Wall Street Journal, the tariffs have neither boosted federal revenues nor sparked the manufacturing revival once promised.

Mixed Economic Picture
Annual inflation stood at 3% in September—above the Federal Reserve’s 2% goal but well below early forecasts. While tariffs have slightly raised prices for goods like clothing and furniture, their broader impact has been modest. Treasury data shows customs revenues lagging expectations, with effective tariff rates around 12.5%, far below the official average of 17%. Many imports still sidestep higher duties through exemptions and loopholes.

Supply Chains on the Move
To cushion the blow, companies are reworking global supply chains. Production is shifting from China to countries such as Vietnam, Mexico, and Turkey, where tariffs are lower. Major retailers have stockpiled inventory or turned to bonded warehouses to delay payments, while logistics firms report rising interest in free-trade zones as importers explore every avenue to limit costs.

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