🐻 With Donald Dump's return to the presidency, his new import tariffs raise concerns about inflation in the U.S., as they are set to take effect on April 5, 2025. However, the impact may be less than it appears over time.
In short, "it was America's day of freedom," according to the American President. However, there are some points to be monitored.
😎 Which sectors will be practically affected? It cannot be stated that all sectors will be affected by tariffs. It is true that some industries depend more on imports and will feel a greater impact, such as electronics and automotive, which import essential components.
However, sectors that depend less on imports or have strong domestic production will suffer less impact. Some examples: Agriculture, energy, construction, software, financial services, and entertainment.
📦 Reorganization of Supply Chains: Companies may change suppliers to countries that do not face tariffs, reducing the effect on prices and strengthening trade in other more advantageous regions, either regionally or in terms of currency exchange.
For example, the U.S. does not import iPhones from all the tariffed countries, but rather from China and India, where measures can be circumvented with increased domestic production by companies or purchase orders made in countries with lower rates or better currency trade-offs.
🏭 Increase in Domestic Production: Through the Chips Act, the U.S. has already allocated over $53 billion, thus encouraging the manufacturing of semiconductors within the U.S. to reduce dependence on imports from Asia, especially China and Taiwan, which may help stabilize the feared inflation in the long term.
Companies like Intel, TSMC, and Samsung are building factories in the U.S., but large-scale production takes time. Even with investments, current costs are high, and there is still dependence on inputs from other countries. Nevertheless, in the long term, this tends to help the U.S. economy with job growth and strengthening of essential local trade.
Thus, the affected sectors can also circumvent the problem with increased domestic production, leading to the consequent hiring of employees and a decrease or minimal increase in market prices, encouraging healthy growth of the U.S. economy over the coming months.
And you, do you think these tariffs will have a significant impact on inflation or will they be manageable? 💬