After a week of market turmoil, President Trump announced he would reset his most extreme tariffs to 10 percent across the board, with the exception of China — which he boosted to a 125% tariff rate. Even at the reduced level, the tariff rates are the highest the nation has seen in many decades.And higher tariffs translate to higher prices for American consumers. Martha Gimbel of the Budget Lab at Yale takes an imaginary walk through a big box store to look at how much more people might pay for t-shirts, rice, medication and other staples. For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org.Email us at considerthis@npr.org.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy
Chapter 1: What are the implications of Trump's tariff announcement?
Here's a tale of two campaign promises. The first is from back in August. Then-candidate Donald Trump delivered it at a lectern flanked by tables full of groceries.
You're looking at things behind me. They did a nice job. Wow.
He started listing price hikes.
Look at that. Up 46 percent eggs. Wow.
That occurred under the Biden administration.
I haven't seen Cheerios in a long time. I'm going to take them back with me. Bacon is through the roof. They're all through the roof. The milk, everything is bad.
And then Trump promised to fix it.
And we're going to straighten it out. We're going to bring prices way down and we'll get it done fast.
But his promise to cut inflation and bring down prices has run headlong into another campaign pledge. You know, the one that's been completely dominating the news for the past week. He talked about that one in August, too.
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Chapter 2: How will tariffs impact the global economy?
I mean, also think about tariffs, right? They're placed on goods. So poor people tend to spend more of their income on goods, right? If you have a tight budget, you're buying food, you're buying gas. If you're richer, you may be paying more services, right? You're paying for tutors for your kids. You're paying for a dog walker. Those are not tariffed.
Right. Well, if that's the impact on the individual, let's talk about the impact on nations. You have looked at how damaging the system of tariffs is likely to be to the gross domestic product of various countries around the world. Who are the biggest winners and losers?
Well, the biggest loser is Canada. But after them, the second biggest loser is us. So congratulations to us.
The United States loses the most.
The United States loses.
In terms of its gross domestic product. Well, how does China fare in all of this, given that it is the primary target above all others so far?
China doesn't do well, but it does do slightly better than the United States. I should say you'll see places like the EU or the UK actually do better in the long run as world trade adjusts to the new reality. So it just speaks to the way that we're really taking ourselves out of the global economy.
Martha Gimbel is the executive director and co-founder of the Budget Lab at Yale University. Thank you so much for taking this shopping trip with us.
Anytime.
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