US Inflation Slows Amid Trump’s Tariff Shifts

The Bureau of Labor Statistics reported that US inflation decreased to 2.3% annually in April from 2.4% in March despite President Donald Trump introducing his “Liberation Day” tariffs during that month. The annual core inflation rate which excludes food and energy increased to 2.8% compared to 2.4% previously. The report demonstrates businesses face a 30% import tax on Chinese products and a 10% tax on other imports although Trump later reduced the 145% rate through agreements with China and the UK. The University of Michigan survey revealed that inflation expectations reached 6.5% which stands as the highest level since 1979. According to a Harris/Guardian poll 60% of Americans put off important financial objectives because of economic concerns. The delayed effects of tariffs on prices have been observed by economists including Ryan Sweet from Oxford Economics because businesses are using pre-tariff stockpiles to avoid immediate price increases. The US faces elevated inflation because of its high effective tariff rate against China which exceeds levels seen during the 1930s according to Sweet. Federal Reserve Chair Jerome Powell predicted that tariffs would push back the 2% inflation target by twelve months while creating job market challenges. Through social media Trump stated that drug prices along with other costs would experience substantial decreases despite his critics attributing inflation to tariffs. The market experienced a positive reaction following the 90-day US-China tariff suspension but consumers remain concerned about price increases which are expected to occur during summer.