Since coming into office for the second time, President Donald Trump has introduced tariffs on most US trading partners around the world.
Some of the initial tariffs announced last year were scaled back by the president as the US made trade agreements with countries. In February, the Supreme Court outlawed most of the remaining additional global levies.
However, the president immediately announced a new 10% global tariff to replace the ones struck down by the court.
While Trump argued the tariffs would increase America’s tax earnings, boost manufacturing and encourage people to buy US-made goods, the higher import taxes have also had an impact on inflation, according to research from the Federal Reserve Bank of New York.
Higher tariffs – which are levies that businesses pay on the goods they import – directly raise prices for US companies unless the overseas firms they are buying from lower prices to absorb some of the cost.
In response to the higher tariffs introduced by the president, the New York Fed found exporters reduced prices very little, meaning US-based businesses ended up absorbing nearly 90% of the cost of the added tax.
