Consumers are already feeling the effects of price increases over the past few years, making this a key concern.
The United States imposed 25% tariffs on goods from Canada and Mexico. However, Commerce Secretary Howard Lutnick said later on Tuesday that the US would likely meet Canada and Mexico “in the middle”, with an announcement coming as soon as Wednesday.Read Here | This Indian company believes it may benefit from US tariffs on other countries
S&P Global Ratings believes the US economy may slow down further in the first quarter, with GDP growth now projected to be around 1.5% instead of the earlier 2.5%.”The first quarter is already running a little bit negative,” Panday said, pointing to weather disruptions and businesses rushing imports ahead of tariffs. While some recovery is expected in February and March, overall growth is likely to be softer.
S&P Global Ratings sees tariffs as not just trade restrictions—they are also being used to negotiate deals. The US administration is taking a tough opening stance with high tariffs but may be open to compromise. “If he thinks he’s getting a good deal, he will compromise,” Panday said, referring to potential middle-ground discussions with Canada and Mexico.
Tariff policies align with efforts to bolster domestic production and national security. The US government is focused on strengthening industries linked to national security, such as steel, aluminium, and critical minerals used in defence and new technologies.
Beyond trade protection, the US government is looking at tariffs as a source of revenue. The administration is expected to use these funds to support policies like extending tax cuts. This adds another layer to the decision, making it not just about trade but also about budget planning.
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