Trump's 'Tariff Bomb' Shock Becomes Reality... "Will Appear This Summer"

Yale: "Annual Purchasing Power Loss of $4,400"
Price Increases to Begin with Food, Followed by Manufactured Goods

Experts have predicted that prices will rise around this summer due to President Donald Trump's tariff policies and trade war.

According to US CNBC on the 10th (local time), Mark Zandi, chief economist at Moody's, said, "I think inflation statistics will become quite serious as early as May, or by June or July at the latest."

Donald Trump, President of the United States, announcing reciprocal tariffs. Photo by Reuters-Yonhap News

Experts expect importers to pass on the costs of tariffs to consumers. While opinions differ on whether the tariffs will be a one-time shock or a sustained impact, there is no disagreement that consumers will be affected.

According to a report released on the 9th by the Yale Budget Research Institute, consumers are expected to lose an average annual purchasing power of $4,400 (approximately 6.37 million KRW) in the short term.

Experts said that the impact of tariffs has not yet significantly appeared in government inflation data. Economist Zandi suggested that concerns over the global trade war may have had a positive effect on March inflation, as oil prices fell due to fears of a global economic recession, lowering energy prices.

Preston Caldwell, Morningstar's chief US economist, said, "It will take time for the inflation shock to affect the system," adding, "At first, it may look better than expected."

Thomas Ryan, an economist at Capital Economics, stated that if President Trump maintains the tariff policy, consumers will feel the price increases starting in May. This is because it takes time for price hikes to be reflected in the supply chain. Capital Economics expects the Consumer Price Index (CPI) to rise from 2.4% last month to a maximum of about 4% this year, which is double the Federal Reserve's (Fed) target of 2%.

In particular, prices of perishable foods with short shelf lives will rise first, followed by prices of manufactured goods that can be stocked in warehouses. Experts explained that this trend will delay the impact of price increases on consumers.

However, there is considerable uncertainty regarding President Trump's final tariff policy. Economist Zandi predicted that if other countries retaliate or overseas demand decreases, prices in service sectors such as travel and leisure could fall.

Earlier on the 9th, President Trump announced a 90-day suspension of reciprocal tariffs. Most trading partners are subject to a 10% tariff, while China was exceptionally imposed a 145% tariff. Caldwell described this as a "de facto embargo."

This content was produced with the assistance of AI translation services.