President Donald Trump is continuing to release letters sent to various world leaders, outlining the proposed tariff rates on goods imported into the United States. According to reports, most of the rates detailed in these letters are consistent with the levels initially announced on April 2nd. The letters provide a formal record of the administration’s intentions regarding trade policy.
Pantheon Macroeconomics suggests that the true impact of these tariffs will become more apparent next week with the release of the US Consumer Price Index (CPI) data for June. The forthcoming data is expected to offer insights into how businesses are reacting to the increased costs associated with the tariffs. Economists and market analysts are closely watching these figures for signs of inflationary pressure.
“We expect June’s CPI report, due Tuesday, to reveal the core index rose by 0.3 per cent, lifting its inflation rate to 3.0 per cent, from 2.8 per cent in May,” Pantheon Macroeconomics said in a note. The firm also noted, “Evidence suggests that many retailers are hiking prices to claw back tariff costs, while services prices probably gathered momentum too after a soft patch. The risks to our forecast are skewed to the upside.”
These observations highlight the potential for tariffs to translate into higher consumer prices, as retailers adjust their pricing strategies to offset increased import costs. The June CPI data will be a crucial indicator of the extent to which these tariffs are affecting the broader economy.
