The President of the Federal Reserve of the United States, Jerome Powell, acknowledged at the Monetary Policy Forum of the University of Chicago Booth School of Business that the tariffs imposed by the Trump administration are likely to have inflationary effects. Powell stated that these tariffs could affect exporters, importers, retailers, and to some extent consumers, although he pointed out that it is still uncertain what exact impact they will have.
Since his return to the White House, Donald Trump has threatened to impose tariffs on countries such as Canada, Mexico, and China. Recently, he announced a significant increase in tariffs but then rolled back after economic concerns and negative reactions in the markets.
After discussions with Canadian Prime Minister Justin Trudeau, Mexican President Claudia Sheinbaum, and executives of automotive companies, Trump decided to reduce or set aside tariffs for Mexico and Canada. Sheinbaum mentioned that Mexico would review tariffs on Chinese shipments as part of a possible agreement to strengthen the North American region against Chinese imports.
On the other hand, U.S. Treasury Secretary Scott Bessent expressed that Mexico has proposed matching Washington's tariffs on China, urging Canada to do the same to create a "Fortress of North America" to counter Chinese imports. However, Trump has offered pardons to Mexico and Canada by exempting their products from the established 25% tariffs.
Amid these trade dynamics, China expressed its rejection of the imposition of tariffs by certain countries, disrupting the international trade order and impacting the stability of global industrial supply chains. Chinese Commerce Minister Wang Wentao stated that Beijing will do everything possible to support foreign trade in this situation.
In this context, Powell expressed the existing uncertainty about the long-term effects of the tariffs and highlighted the importance of waiting to assess how the incoming administration's trade, fiscal, and immigration policies will evolve in the United States.
