AI Tempers Trump Tariffs

At the beginning of the year, the world was in striking agreement on one point: if Trump went ahead with tariffs, it would strengthen the dollar and trigger

stagflation

. Chief executives, investors and commentators all said the same. Economists estimated that every percentage point increase in the tariff rate would shave 0.1% off US growth and add 0.1% to inflation. But so far, the consequences have been far less disruptive than just about anyone expected.
Some analysts still think that’s because Trump’s threats have been mostly posturing. But the effective US tariff rate has already risen from 2.5% to 15%. Tariff revenue is rolling in at an annual rate above $300bn, roughly four times the pace this time last year.