Highest US tariffs since WWII set to cut growth, boost inflation

President Donald Trump’s reciprocal levies will likely weigh on economic growth and push up prices while hammering the global economy, according to Bloomberg Economics. The tariffs announced Friday, which run from 10% to 41% and mark the highest rates since World War II, would increase the average U.S. duty to 15.2% from 2.3% in 2024, according to analysis by Maeva Cousin, chief trade economist at BE. That would cut U.S. GDP by 1.8% and boost core prices by 1.1% over two to three years, the analysis showed. Globally, the higher import taxes are set to sap demand across trading partner economies. The figures could change, though, depending on how much companies are willing to absorb in their profit margins and what they pass on to consumers. Trading partners The estimate also depends on the tariffs being implemented as announced and deals on car levies with the EU, Japan and South Korea sticking. It also doesn’t include any potential deal with China, which is still negotiating with the White House. There are also sectoral tariffs that are still being considered by U.S. officials that could sway the impact. “The tariffs will deliver a major blow to global GDP,” Cousin wrote in a Friday research note. “For many U.S. trading partners, the higher tariffs create downside risks to demand — which will weigh on both activity and inflation.” The biggest losers are China, which is still subject to a number of tariffs including a 20% level tied to fentanyl, and Switzerland, where the reciprocal tariff rate shot up to 39% — even higher than the April 2 level, Cousin said. There is a silver lining: The seven-day window before the new charges are implemented gives some countries room to further negotiate their tariff levels down. By Katia Dmitrieva

Highest US tariffs since WWII set to cut growth, boost inflation

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Published August 01, 2025

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Highest US tariffs since WWII set to cut growth, boost inflation