Title: PolitiFact | Donald Trump has floated big tariffs. What could the impact be?
Headings: Donald Trump has floated big tariffs. What could the impact be?
Donald Trump has floated big tariffs. What could the impact be?
What has Trump said?
How tariffs are supposed to work
What are the risks?
How bad could the impact be?
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Content: • Many production costs could also rise. A lot of materials that are used to make products sold in the United States could see their prices rise as well, depending on the item in question and where it comes from. The enactment of tariffs could produce delays or price spikes that spiral across the economy, since the economy is now tightly interwoven into complex and time-sensitive "supply chains," said Caroline Freund, a senior fellow at the Peterson Institute for International Economics. "Production today, especially among the big companies, is so integrated, whether it’s cars or planes or tractors," Freund said. " All of a sudden if there’s a tariff affecting the wrong input, it would mess up the entire production process." And any slowdown in the supply chain could mean layoffs for producers and a hit to the broader U.S. economy. • The stock market would fall and interest rates could rise. " On the day it becomes clear that a tariff will pass Congress, there will be a very big change in stock prices," said Simon Johnson, a professor of entrepreneurship at MIT’s Sloan School of Management. " Presumably there will also be a change in interest rates. The credit risk would go up.