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Economists warn that enacting tariffs at a time of persisting price pressures is a risky move.
- Feb. 13, 2025, 10:23 a.m. ET
Hot inflation has raised the stakes of President Trump’s plans to escalate his use of tariffs on the country’s biggest trading partners, risking even higher consumer prices and pushing back the prospects of the Federal Reserve lowering interest rates soon.
New inflation data released this week showed price pressures intensifying. The unexpected jump in January’s Consumer Price Index reflected in part seasonal quirks that tend to crop up at the start of the year, but the increase overall was large enough to fuel fresh apprehension about the outlook.
Mr. Trump was quick to point fingers at his predecessor — a line of attack later seized on by Karoline Leavitt, his press secretary, who called the latest inflation data an “indictment on the Biden administration’s mismanagement of the inflation crisis and their lack of transparency in addressing it.”
But imposing tariffs at a time when inflation is not yet vanquished is seen as a risky strategy, especially for a president who vowed on the campaign trail that he would bring prices down on “Day 1.”
“Introducing large increases in the prices of imported goods could breathe new life into some of the inflationary embers that are still glowing in the economy,” said Michael Strain, an economist at the American Enterprise Institute, a conservative think tank.
In Mr. Trump’s first weeks back in the White House, he has already put an additional 10 percent tariff on all U.S. imports from China and slapped 25 percent tariffs on metal imports. He also has held out the possibility of imposing 25 percent tariffs on nearly all goods from Canada and Mexico, although he temporarily paused those levies until March 4. Altogether, the measures will hit more than $1.3 trillion of U.S. imports, and the president has said that tariffs for many other countries and industries, from copper to pharmaceuticals, are in the works.
