The U.S. tariff rates have returned to the levels of 1909
According to an announcement by Fitch Ratings, the international credit rating agency, the United States' tariffs have returned to the levels of 1909, which will slow down the growth rate of the country's gross domestic product (GDP), accelerate inflation, and lead to a decline in corporate profits. As a result, the negative impact on the economy will outweigh any benefits that U.S. companies may gain from increased protectionism.
On April 2nd, the U.S. President signed an order imposing reciprocal tariffs on goods from other countries, with a minimum rate of 10%. Additionally, most countries will face even higher tariffs. The Office of the United States Trade Representative explained that the increase in tariffs is due to trade imbalances with certain countries, with the aim of achieving trade balance.
Fitch Ratings pointed out in its report: "Based on our assessment, these changes will raise the overall effective tariff rate in the U.S. to approximately 25%, significantly higher than the 18% we predicted for 2025 in our March Global Economic Outlook report, and also the highest rate in 115 years."
Fitch analysts believe that the U.S. tariffs have reached a level that could change the global economic outlook, greatly increasing the risk of an economic recession in the U.S. and limiting the Federal Reserve's ability to continue cutting interest rates. Given the higher-than-expected tariff levels, it is highly likely that the U.S. GDP growth rate this year will be lower than the 1.7% forecast in March.
In conclusion, the negative impact on the economy will outweigh any benefits that U.S. companies may gain from increased protectionism.
Original Source: https://www.toutiao.com/article/1828424899962121/
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