Trade Tensions: Temporary Inflation or Long-term Impact?

Treasury Secretary Scott Bessent suggests that President Trump's tariffs may cause a one-time slight inflation increase. As Trump pushes for reciprocal tariffs, concerns grow about a global trade war. Economists warn that these measures may exacerbate inflation, despite Trump's promises to reduce consumer costs.

President Donald Trump's tariffs could lead to a one-time slight increase in U.S. inflation, according to Treasury Secretary Scott Bessent, who spoke following the administration's plan for additional levies.

Bessent noted that while some price hikes could occur, much of the impact may be mitigated by currency fluctuations and the capacity of foreign producers to absorb costs. Trump's directive for his economics team to develop reciprocal tariffs on countries taxing U.S. imports heightens the risk of a global trade war.

Despite Trump's campaign promises to cut costs for inflation-burdened Americans, his pursuit of higher tariffs raises concerns about worsening inflation. U.S. markets were unsettled by recent upticks in inflation, and Trump's tariffs on key trading partners like Mexico, Canada, and China risk triggering broader economic repercussions.

(With inputs from agencies.)