The United States economy is already feeling the pressure of anticipated tariff inflation that will begin in June. Unfortunately, this strain will probably continue through the summer months, in July and August. Economic watchdogs are predicting these changes to have serious ramifications for consumers and businesses on both state and national levels as we continue to face an overall economic slowdown.
The national economy is starting to slow down this year. Consequently, as outlined in this blog, the U.S. is bracing for a massive wave of tariff inflation that’s set to hit in the coming months. According to experts, this new inflationary trend will be sensitive to a number of variables and responsive in short order. One of the biggest reasons for this shift is immigration. Surging immigration too is making costs soar, either directly through its effects on supply chains and labor markets in various sectors.
The anticipated inflationary impact of tariffs isn’t going to end in June. They were scheduled to remain in place through July and August, setting up several months of painful economic dislocation for consumers. With tariffs almost certain to increase prices on imported products, families will begin experiencing that burden in their day-to-day spending. The price of groceries, gas, and other necessities may increase, forcing consumers to reconsider their spending plans with the advent of those new realities.
Moreover, the U.S. oil industry’s past role as a “shock absorber” for other economic shocks is in question. In times of economic despair, the oil sector has traditionally been a stabilizing force on energy prices. Under today’s conditions, serious questions need to be asked about whether it can continue to cushion the expected blows from tariff inflation. Analysts worry that if oil prices spike when the tariffs begin hitting other products, the economy will be hit with a double whammy.
As we enter this rapidly changing economic environment, vigilance is a necessity. Policymakers and economists should not overlook the short term impacts of tariff-induced inflation. They should consider the long-term impact on the economy. Businesses are walking in uncharted waters. They need to change their fare structures and service designs in order to address increasingly expensive inputs.