According to PANews, JPMorgan's Chief Economist Michael Feroli has issued a report highlighting the potential economic impact of tariffs imposed by U.S. President Donald Trump. Feroli notes that while the tariffs could generate substantial revenue, they may lead to increased prices, affecting consumer purchasing power. He stated that the newly announced tariffs could raise nearly $400 billion in revenue, approximately 1.3% of GDP. The measures are expected to increase personal consumption expenditure prices by 1-1.5% this year, with inflation effects anticipated by mid-year.
The resulting hit to purchasing power could lead to negative growth in real disposable personal income from the second to third quarter, potentially causing a contraction in real consumer spending during these periods. This impact alone could pose a risk of recession for the economy.
Additionally, JPMorgan analysts estimate that over one-third of emerging market companies may be significantly affected once U.S. trade tariffs take effect. The bank's analysis of the CEMBI emerging market corporate debt index, which covers more than 750 companies, suggests that 36% of these firms could be impacted, with 16% facing substantial challenges.
