#TrumpTariffs

In 2025, U.S. President Donald Trump reinstated widespread tariffs, escalating trade tensions with China. Tariffs on Chinese imports peaked at 145% before being temporarily reduced to 30% under a 90-day cooling agreement, where China similarly lowered its tariffs to 10%.

Despite these measures, the U.S. inflation rate slowed to 2.3% in April, the lowest level in four years, due to pre-stocked inventories of imported goods. However, experts expect prices to rise as these inventories deplete, potentially leading to increased inflation in the summer.

Estimates from the Penn Wharton Budget Model suggest that these tariffs could reduce U.S. GDP by 6% in the long term and lead to a 5% decline in wages, translating to a loss of $22,000 for the average middle-income household over their lifetime.

Meanwhile, India has benefited from these tensions, as U.S. companies like Apple have shifted some of their production there, bolstering India's ambitions to become a global industrial hub.

While markets have eased recession fears, economic challenges remain due to continued high tariffs and supply chain disruptions.