He noted that President Donald Trump raised the average tariff level to about 15%, and on some Chinese goods — temporarily to 125%. Modeling the impact of such tariffs on the global economy shows a significant slowdown in growth and a rise in prices, creating a risk of stagflation — a combination of low growth and high inflation.
According to the economist, markets reacted negatively to the rising tariffs. Investors expressed concerns about a potential new inflation spike; however, actual data from the summer showed that inflation in the U.S. has not accelerated but has also not decreased.
“One of the reasons for this was the advance preparation for increased imports. American companies and foreign suppliers, anticipating the introduction of tariffs, preemptively increased shipments, creating stockpiles of cheaper goods. As a result, at the beginning of 2025, the volume of imports into the U.S. was significantly higher than in previous years,” the Bloomberg report states.
Meanwhile, signs of weakening are beginning to appear in the U.S. economy. The labor market is showing a slowdown: whereas previously more than 100,000 jobs were created each month, the pace of employment growth has significantly decreased, and in some months, job losses were even recorded. This increases the risk that the effects of the tariffs will coincide with an already weakened economic dynamic.
According to Bloomberg, the main burden of the tariffs falls on American companies, which are currently offsetting rising costs by reducing profits rather than increasing prices. However, as Tom Orlik emphasizes, tariff revenues do not come "from nowhere," and in the long term, these costs will be borne by U.S. businesses and households.
