The U.S. government is poised to shake up global trade in April 2025. Tariff rate increases are scheduled to go into effect on imported goods from Canada, Mexico and China. In the early months of his 2nd term, President Trump has proposed several other tariff rate increases targeting specific industries like automakers and pharmaceutical companies. Some economists argue these new trade policies will be inflationary. Others say foreign countries will pay for them. Research from the Federal Reserve, shows that consumer prices may rise if businesses pass the increasing tax burden onto their consumers. But the central bank’s leaders are considering the full effects of the administration’s trade, immigration, regulatory and fiscal policies before adjusting monetary policy. Watch the video to find out if the new tariffs will be inflationary and what, if anything, the Federal Reserve will do about it.
Chapters:
0:00 Cold open
1:17 Markups
4:07 Imported products
6:11 Transitory inflation
Produced and Edited by: Carlos Waters
Additional Camera by: Jordan Smith
Animation: Jason Reginato
Senior Director of Video: Lindsey Jacobson
Additional Footage: Getty Images
Additional Sources: Allianz, Bolton Partners, Fidelity, Grant Thornton, Federal Reserve Bank of Boston, Federal Reserve Bank of Minneapolis, Morningstar, Peterson Institute for International Economics
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Will Trump’s Tariffs Cause Inflation?
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