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    Trump Is Set to Unveil Expansive Global Tariffs

    President Trump is set to unveil his most expansive tariffs to date on Wednesday afternoon, when he will detail potentially punishing levies on countries around the globe, including America’s largest trading partners.Mr. Trump has promised for months to impose what he calls “reciprocal” tariffs, which the president says will correct years of “unfair” trade in which other countries have been “ripping off” America.“We helped everybody, and they don’t help us,” Mr. Trump said on Monday.Exactly how he plans to structure the new tariffs is not yet clear. The White House press secretary said Tuesday afternoon that Mr. Trump had decided on a course of action and that the new tariffs would go into effect immediately, but that he and his trade advisers were continuing to hash out details.The president has talked about basing a new tariff rate for countries on the tariffs they place on American products, as well as other trading practices that the Trump team deems unfair.Mr. Trump has also considered a flat 20 percent tariff on all trading partners. Such a levy would be aimed more at generating revenue to offset the tax cuts that he hopes to push through Congress.Either approach would be a significant escalation toward a trade war that Mr. Trump seems eager to unleash. Governments across the world have been preparing to hit back if the president raises tariffs, raising the potential for a destabilizing economic battle that drives up costs as Mr. Trump tries to force supply chains back to the United States.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Trump’s tariffs are expected to raise consumer prices, but a key question remains: By how much?

    The U.S. government is set to increase tariff rates on several categories of imported products. Some economists tracking these trade proposals say the higher tariff rates could lead to higher consumer prices.
    One model constructed by the Federal Reserve Bank of Boston suggests that in an “extreme” scenario, heightened taxes on U.S. imports could result in a 1.4 percentage point to 2.2 percentage point increase to core inflation. This scenario assumes 60% tariff rates on Chinese imports and 10% tariff rates on imports from all other countries.

    The researchers note that many other tariff proposals have surfaced since they published their findings in February 2025. 
    Price increases could come across many categories, including new housing and automobiles, alongside consumer services such as nursing, public transportation and finance. 
    “People might think, ‘Oh, tariffs can only affect the goods that I buy. It can’t affect the services,'” said Hillary Stein, an economist at the Boston Fed. “Those hospitals are buying inputs that might be, for example, … medical equipment that comes from abroad.” 
    White House economists say tariffs will not meaningfully contribute to inflation. In a statement to CNBC, Stephen Miran, chair of the Council of Economic Advisers, said that “as the world’s largest source of consumer demand, the U.S. holds all the leverage, which means foreign suppliers will have to eat the economic burden or ‘incidence’ of the tariffs.” 
    Assessing the impact of the administration’s full economic agenda has been a challenge for central bank leaders. The Federal Open Market Committee decided to leave its target for the federal funds rate unchanged at the meeting in March. 

    The Fed targets its overnight borrowing rate at between 4.25% and 4.5%, with the effective federal funds rate at 4.33% on March 31, according to the New York Fed. The core personal consumption expenditures price index inflation rate rose to 2.8% in February, according to the Commerce Department. Forecasts of U.S. gross domestic product suggest that the economy will continue to grow at a 1.7% rate in 2025, albeit at a slower pace than what was forecast in January.  
    Consumers in the U.S. and businesses around the world are bracing for impact.  “There is a reason why companies went outside of the U.S.,” said Gregor Hirt, chief investment officer at Allianz Global Investors. “Most of the time it was because it was cheaper and more productive.” 
    Watch the video above to learn how much inflation tariffs may cause. More

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    Trump’s tariff gambit will raise the stakes for an economy already looking fragile

    President Donald Trump is set Wednesday to begin the biggest gamble of his nascent second term, wagering that broad-based tariffs on imports will jumpstart a new era for the U.S. economy.
    The big problem right now is no one outside the administration knows quite how those goals will be achieved, and what will be the price to pay.
    On their surface, tariffs are a tax on imports and, theoretically, are inflationary. In practice, though, it doesn’t always work that way.
    The U.S. economy already is showing signs of a stagflationary impulse where growth is slowing and inflation is proving stickier than expected.

    U.S. President Donald Trump speaks alongside entertainer Kid Rock before signing an executive order in the Oval Office of the White House on March 31, 2025 in Washington, DC. 
    Andrew Harnik | Getty Images

    President Donald Trump is set Wednesday to begin the biggest gamble of his nascent second term, wagering that broad-based tariffs on imports will jumpstart a new era for the U.S. economy.
    The stakes couldn’t be higher.

    As the president prepares his “liberation day” announcement, household sentiment is at multi-year lows. Consumers worry that the duties will spark another round of painful inflation, and investors are fretting that higher prices will mean lower profits and a tougher slog for the battered stock market.
    What Trump is promising is a new economy not dependent on deficit spending, where Canada, Mexico, China and Europe no longer take advantage of the U.S. consumer’s desire for ever-cheaper products.
    The big problem right now is no one outside the administration knows quite how those goals will be achieved, and what will be the price to pay.
    “People always want everything to be done immediately and have to know exactly what’s going on,” said Joseph LaVorgna, who served as a senior economic advisor during Trump’s first term in office. “Negotiations themselves don’t work that way. Good things take time.”
    For his part, LaVorgna, who is now chief economist at SMBC Nikko Securities, is optimistic Trump can pull it off, but understands why markets are rattled by the uncertainty of it all.

    “This is a negotiation, and it needs to be judged in the fullness of time,” he said. “Eventually we’re going to get some details and some clarity, and to me, everything will fit together. But right now, we’re at that point where it’s just too soon to know exactly what the implementation is likely to look like.”
    Here’s what we do know: The White House intends to implement “reciprocal” tariffs against its trading partners. In other words, the U.S. is going to match what other countries charge to import American goods into their countries. Most recently, a figure of 20% blanket tariffs has been bandied around, though LaVorgna said he expects the number to be around 10%, but something like 60% for China.
    What is likely to emerge, though, will be far more nuanced as Trump seeks to reduce a record $131.4 billion U.S. trade deficit. Trump professes his ability to make deals, and the saber-rattling of draconian levies on other countries is all part of the strategy to get the best arrangement possible where more goods are manufactured domestically, boosting American jobs and providing a fairer landscape for trade.
    The consequences, though, could be rough in the near term.

    Potential inflation impact

    On their surface, tariffs are a tax on imports and, theoretically, are inflationary. In practice, though, it doesn’t always work that way.
    During his first term, Trump imposed heavy tariffs with nary a sign of longer-term inflation outside of isolated price increases. That’s how Federal Reserve economists generally view tariffs — a one-time “transitory” blip but rarely a generator of fundamental inflation.
    This time, though, could be different as Trump attempts something on a scale not seen since the disastrous Smoot-Hawley tariffs in 1930 that kicked off a global trade war and would be the worst-case scenario of the president’s ambitions.
    “This could be a major rewiring of the domestic economy and of the global economy, a la Thatcher, a la Reagan, where you get a more enabled private sector, streamlined government, a fair trading system,” Mohamed El-Erian, the Allianz chief economic advisor, said Tuesday on CNBC. “Alternatively, if we get tit-for-tat tariffs, we slip into stagflation, and that stagflation becomes well anchored, and that becomes problematic.”

    The U.S. economy already is showing signs of a stagflationary impulse, perhaps not along the lines of the 1970s and early ’80s but nevertheless one where growth is slowing and inflation is proving stickier than expected.
    Goldman Sachs has lowered its projection for economic growth this year to barely positive. The firm is citing the “the sharp recent deterioration in household and business confidence” and second-order impacts of tariffs as administration officials are willing to trade lower growth in the near term for their longer-term trade goals.
    Federal Reserve officials last month indicated an expectation of 1.7% gross domestic product growth this year; using the same metric, Goldman projects GDP to rise at just a 1% rate.
    In addition, Goldman raised its recession risk to 35% this year, though it sees growth holding positive in the most-likely scenario.

    Broader economic questions

    However, Luke Tilley, chief economist at Wilmington Trust, thinks the recession risk is even higher at 40%, and not just because of tariff impacts.
    “We were already on the pessimistic side of the spectrum,” he said. “A lot of that is coming from the fact that we didn’t think the consumer was strong enough heading into the year, and we see growth slowing because of the tariffs.”
    Tilley also sees the labor market weakening as companies hold off on hiring as well as other decisions such as capital expenditure-type investments in their businesses.
    That view on business hesitation was backed up Tuesday in an Institute for Supply Management survey in which respondents cited the uncertain climate as an obstacle to growth.
    “Customers are pausing on new orders as a result of uncertainty regarding tariffs,” said a manager in the transportation equipment industry. “There is no clear direction from the administration on how they will be implemented, so it’s harder to project how they will affect business.”
    While Tilley thinks the concern over tariffs causing long-term inflation is misplaced — Smoot-Hawley, for instance, actually ended up being deflationary — he does see them as a danger to an already-fragile consumer and economy as they could tend to weaken activity further.
    “We think of the tariffs as just being such a weight on growth. It would drive up prices in the initial couple [inflation] readings, but it would create so much economic weakness that they would end up being net deflationary,” he said. “They’re a tax hike, they’re contractionary, they’re going to weigh on the economy.”
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    Trump Says His Tariffs Will Take Effect Wednesday

    President Trump has settled on a final plan for sweeping “reciprocal” tariffs, which are expected to take effect on Wednesday after he announces the details at an afternoon Rose Garden ceremony.The White House press secretary, Karoline Leavitt, confirmed the timeline in a briefing with reporters on Tuesday, adding that Mr. Trump had been huddling with his trade team to hash out the finer points of an approach meant to end “decades of unfair trade practices.”When pressed on whether the administration was worried the tariffs could prove to be the wrong approach, Ms. Leavitt struck a confident note: “They’re not going to be wrong,” she said. “It is going to work.”The administration has been weighing several different tariff strategies in recent weeks. One option examined by the White House is a 20 percent flat tariff on all imports, which advisers have said could help raise more than $6 trillion in revenue for the U.S. government.But advisers have also discussed the idea of assigning different tariff levels to countries depending on the trade barriers those countries impose against American products. They have also said that some nations might avoid tariffs entirely by striking trade deals with the United States.Speaking to reporters in the Oval Office on Monday, Mr. Trump said the United States would be “very nice, relatively speaking,” in imposing tariffs on a vast number of countries — including U.S. allies — that he believes are unfairly inhibiting the flow of American exports.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Euro zone inflation dips to 2.2% in March as U.S. tariffs loom

    Annual Euro zone inflation dipped as expected to 2.2% in March, according to flash data from statistics agency Eurostat published Tuesday.
    It comes after recent preliminary data showed that inflation came in lower than forecast in several major euro zone economies.
    The European Union is at the receiving end of tariffs introduced by U.S. President Donald Trump, including a 25% levy on imported cars.

    A man pushes his shopping cart filled with food shopping and walks in front of an aisle of canned vegetables with “Down price” labels in an Auchan supermarket in Guilherand Granges, France, March 8, 2025.
    Nicolas Guyonnet | Afp | Getty Images

    Annual Euro zone inflation dipped as expected to 2.2% in March, according to flash data from statistics agency Eurostat published Tuesday.
    The Tuesday print sits just below the 2.3% final reading of February.

    So called core-inflation, which excludes more volatile food, energy, alcohol and tobacco prices, edged lower to 2.4% in March from 2.6% in February. The closely watched services inflation print, which had long been sticky around the 4% mark, also fell to 3.4% in March from 3.7% in the preceding month.
    Recent preliminary data had showed that March inflation came in lower than forecast in several major euro zone economies. Last month’s inflation hit 2.3% in Germany and fell to 2.2% in Spain, while staying unchanged at 0.9% in France.

    ECB decision ahead

    The figures, which are harmonized across the euro area for comparability, boosted expectations for a further 25-basis-point interest rate cut from the European Central Bank during its upcoming meeting on April 17. Markets were pricing in an around 80% chance of such a reduction after the release of the euro zone inflation data on Tuesday, according to LSEG data.
    The easing of services inflation especially increased chances of an ECB interest rate cut, Jack Allen-Reynolds, deputy chief euro zone economist at Capital Economics, said in a note Tuesday.
    “We think this decline, together with strong evidence that it will fall further … and continued weakness in the latest activity surveys, will be enough to prompt the ECB to cut interest rates by 25bp again later this month,” he noted.

    Separately on Tuesday, data also showed that the seasonally adjusted unemployment rate in the euro area in February hit 6.1%, continuing on its recent downward trend. Economists polled by Reuters had been expecting it to remain unchanged at 6.2%.
    Unemployment usually falls in low-interest rate environments, as businesses can boost their labor spending amid cheap borrowing costs. Sine it began cutting interest rates last June, the ECB has brought its key rate, the deposit facility rate, down from 4% to 2.5%.

    Tariff uncertainty

    The European Union is set to be slapped with tariffs due in effect later this week from the U.S. administration of Donald Trump — including a 25% levy on imported cars.
    While the exact impact of the tariffs and retaliatory measures remains uncertain, many economists have warned for months that their effect could be inflationary.
    The exact impact of tariff policies from the U.S. and its trading partners on inflation is still largely unclear, according to Bert Colijn, chief Netherlands economist at ING, who said deflation is also an option.
    “US tariffs could result in deflationary pressures on the eurozone market as they depress exports and therefore growth,” he said, adding that they could also lead to increased supply of goods on the euro zone market.
    The European Union’s response could be critical in shaping the economic impact of the tariff conflict, Colijn explained.
    “Retaliatory measures from the European Commission will likely have an upward effect on eurozone inflation, though, as they are essentially a domestic tax that gets introduced and will be paid for by consumers to some extent,” he said. More

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    As Trump Stokes Uncertainty, the Fed Asks Businesses Where It Hurts

    The central bank’s outreach to companies has taken on new significance as the outlook for growth and inflation gets cloudier.Chris Bergen, who runs a commercial greenhouse business in northern Minnesota, finds himself “walking a tightrope” roughly two months into President Trump’s second term. Acute uncertainty about how the administration’s trade and immigration policies will unfold and affect the economy has made him much more cautious about any expansion plans.As one of the country’s biggest producers of bedding plants, perennials and other flowers, Bergen’s Greenhouses is exposed on many fronts.Every June, it trucks in more than six million pounds of peat moss from Manitoba. Suppliers have stopped quoting prices until they have more clarity on tariffs. The plastic flower pots that Mr. Bergen imports from China could also wind up costing more if tariffs remain in place, squeezing already “razor-thin margins,” he said. He is also worried about needing to find workers if Mr. Trump, as part of an immigration crackdown, ends a program that provides temporary visas to many of the company’s agricultural workers.“We’re not putting our foot on the brake, but we are taking our foot off the gas,” said Mr. Bergen, whose family has run the business for over a century.That caution is one of the biggest concerns for the Federal Reserve, which is facing an increasingly challenging economic moment with little precedent. The central bank is trying to get a better read on the economy as it debates when — or if — it can again lower interest rates with inflation still too high for its liking. Businesses are warning of both higher prices and slower growth, effects that have yet to show up entirely in the economic data. The 12 regional presidents at the central bank have always kept close tabs on businesses in their districts in order to understand how economic conditions are evolving. That local outreach has taken on new significance as the range of possible outcomes has widened drastically.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Want to Play a Game? Global Trade War Is the New Washington Pastime.

    Two dozen trade experts gathered recently to simulate how a global trade war would play out. The results were surprisingly optimistic.The world’s biggest powers were deep in a trade war. Economic losses from the tariffs that President Trump had imposed on most of the world, along with global retaliation, were accumulating. Jobs were being lost, inflation was ticking up and the world was both frustrated with and anxious about the United States.While the stakes were real, the trade war was not. Instead, it was a simulation to better understand how a global trade fight might unfold.Last month, two dozen trade experts from the United States and other countries gathered at a Washington think tank to try to simulate what could happen if Mr. Trump moves ahead with his plan to impose punishing tariffs on America’s biggest trading partners.Teams representing China, Europe, the United States and other governments spent a day running between conference rooms, offering proposals to remove the tariffs and make trade deals to forestall economic collapse.The game, which took place at the Center for a New American Security, a bipartisan think tank focused on security issues, included think tank experts and former officials in the Trump and Biden administrations. The exercise was not aimed at predicting the future. Instead, by acting out what might happen, the participants were trying to reveal some of the dynamics that might be at play as Mr. Trump pursues an aggressive trade approach against allies and adversaries alike.In the last two months, Mr. Trump imposed tariffs on China, Canada and Mexico, as well as levies on global steel and aluminum imports. On Wednesday, Mr. Trump is expected to announce a plan to raise tariff rates on other countries, and his 25 percent tariffs on cars and auto parts will go into effect on Thursday.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More