Washington (AP) – When President Donald Trump is preparing to announce new tariffs, the costs of his guidelines for a domestic processing trade will be the focus, which depends on global supply chains, whereby a new analysis indicates that the factory costs could increase by around 2% to 4.5%.
“There will be a money squeeze for many of these companies,” said Chris Bangert-Drowns, the researcher at the Washington Center for Equitable Growth, which carried out the analysis. These apparently petite changes in factories with slim profit margins, said Bangert-Drowns: “Could lead to stagnation of wages unless the costs are not fulfilled.
The analysis published on Tuesday points to the challenges that Trump faces to sell his tariffs as a broader political and economic profit to the public, and not just as proof that his negotiating style has other nations withdrawn. The success of Trump’s politics ultimately depends on whether everyday Americans get richer and experience the factory cities.
Trump has announced new framework conditions with the European Union, Japan, the Philippines, Indonesia and Great Britain, each of which would increase import taxes accused by the United States. He is ready to raise tariffs against goods from dozens of other countries from Friday in the specified area of 15 to 50%.
The US stock market has shown that the tariff rates are not as high as Trump was originally threatened in April and hope for a feeling of feeling of stability in the future. Trump claims that the tariff revenues prevent the budget deficit and facilitate to whip domestic factory jobs while reducing the risks of higher prices.
“We wiped out the inflation,” said Trump last Friday, before entering Scotland Marine.
But there is the possibility of a counter reaction in the form of higher prices and slower growth as soon as the tariffs flow better through the global economy.
A survey by Atlanta in June suggested that companies would hand over half of their tariff costs for US consumers to average through higher prices. Data of the Ministry of Labor show that America has lost 14,000 jobs after Trump introduced his April tariffs and put a lot of pressure on whether a rebound was published in June in June.
With new tariffs there are new costs for factories
The Washington Center for Equitable Growth Analysis shows how Trump’s dedication to tariffs leads potential economic and political costs for his agenda. In the swing states of Michigan and Wisconsin there are more than 1 of 5 jobs in the critical sectors of production, construction, mining and oil bores and warts, which have high exposure to its import tax.
The Trump in artificial intelligence, Trump advertised last week as the future of the economy, depends on imports. More than 20% of the inputs for computer and electronics production are imported, so that the tariffs can ultimately increase a sturdy multitrillion dollar price for building up the technology in the USA
The White House argues that American companies will access new markets due to the trade frames and claim that companies will ultimately benefit from it.
“The label” Made in USA “will resume his global dominance under President Trump,” said the spokesman for the White House, Kush Desai.
Still a lot of uncertainty, but the global economy is exposed to a new tribute
The analysis has limits. Trump’s tariff rates were a moving goal, and the analysis is only displayed at additional costs, not how these costs are absorbed by foreign manufacturers, domestic manufacturers and consumers. Also the legal basis for the tariffs as an “emergency” -st against a US Court of Appeal on Thursday.
Finance Minister Scott Bessent said in an interview last week about the “Kudlow” show countries of FOX Business Network, the tariffs essentially accepted to receive access to the US market. “Everyone is ready to pay a tribute,” he said.
But what Bessent did not say is that US manufacturers also pay a lot of this tribute.
“We are squeezed from all sides,” said Justin Johnson, President of Jordan Manufacturing Co. in Belting, Michigan, northeast of Grand Rapids. His grandfather founded the company in 1949.
The company, which uses parts of Amazon Warehouses, car companies and aerospace companies, has increased the price for an vital raw material – steel coil – this year.
Trump imposed 50% tariffs on imported steel and aluminum. Jordan Manufacturing does not buy foreign steel. Due to the paralyzing foreign competition, Trump’s tariffs have made it possible for domestic US steel manufacturers to increase prices.
Johnson does not accuse her. “There is no red -blooded capitalist who will not increase his prices under these circumstances, he said.
Trump says no inflation from tariffs, but companies see higher prices
The Trump White House insists that inflation in the economy does not appear and a report by the Council of Economic Advisors made this month that the price for imported goods has dropped between December last year and last May. “These findings contradict claims that tariffs or tariff men would lead to an acceleration of inflation,” concludes the report.
Ernie Tedeschi, director of economics at the Yale University budget, said that the more precise measure is to compare the trends of import prices in the past and that the CEA’s own figures have accelerated in recent months.
The most recent estimate from the budget tension in Yale is that the tariffs would lead to the average budget less than usual.
Hold the economy on the edge of a knife
Josh Smith, founder and president of the Montana Knife Co., named himself as a Trump voter, but said that he sees the tariffs on foreign steel and others were other than his business.
For example, Smith has just ordered a 515,000 dollar machine from Germany, which grinds its knife blades up to a pointed edge. Trump had levied a 10% tax on products from the EU, which should increase to 15% as part of the trade frame he announced. Trump’s taxes on the machine is $ 77,250 enough to set an entry-level worker.
Smith would like to buy the inclined machines from an American supplier. But there are none. “There are only two companies in the world that make them and both in Germany,” said Smith.
Then there is imported steel, which Trump loads with 50%. Up to this year, Montana Messer bought the powder steel from Crucible Industries in Syracus, New York. Last December, Crucible explained bankruptcy, and his fortune was bought by a Swedish company, Erasteel, who moved production to Sweden.
Smith defeated the tariffs by buying a year worth one year in advance. From 2026, the special steel, which it will import from Sweden, will be performed with a 50% power.
“The average American does not sit in the position that I am and look at the numbers I am, and make the decisions every day: ‘Hey, we cannot set these additional people because we may have to pay for this steel or this tariff for this mill, he said.”
