ING's James Knightley said in a report that if President-elect Donald Trump implements the tariff plan proposed by the campaign, it could increase inflation and cost every American consumer up to $2,400 a year.
Trump announced a more specific tariff plan today. Knightley said earlier that the increase in commodity costs, combined with labor restrictions brought about by the proposed immigration policy, may cause the US inflation rate to rise by 1 percentage point.
While tariffs can certainly generate significant revenue, he added that the broader economic impact and resulting changes in consumer behavior limit the effectiveness of this policy as a long-term fiscal strategy.
