U.S. President Donald Trump’s ambitious tariff proposal—calling for a universal 10% tariff on imports and a hefty 60% tariff on Chinese goods—may not be as severe as initially thought, according to a recent note from ratings agency S&P Global. The report suggests that while these figures serve as a negotiating starting point, it’s unlikely that such high tariff levels will actually be imposed.
If implemented, the 10% universal tariff could add up to 1.8 percentage points to U.S. inflation, while the 60% tariff on China could contribute an additional 1.2 percentage points. However, S&P Global cautioned that these potential inflationary impacts would likely be offset by adjustments in trade policy as negotiations progress.
The report also highlights that the economic impact of such tariffs could result in a slight dip in U.S. output, with a potential reduction of about 0.5 percentage points. Still, many analysts believe the final tariff rates will be more moderate as the U.S. and its trade partners work to reach a compromise, signaling that Trump’s hardline approach may soften in the coming months.
