According to US Treasury Secretary Janet Yellen, President-elect Donald Trump's proposed tariffs could derail progress in fighting inflation.
The new hefty tariffs that Trump plans to implement could raise prices for American consumers, causing a setback in reducing inflation. "This is a strategy I worry could derail the progress that we've made on inflation and have adverse consequences on growth," Yellen said, adding that it could have negative consequences for US economic growth.
Trump's plan includes imposing a 60% tariff on Chinese imports and a 10% to 20% tariff on goods from other countries. Analysts say a 40% tariff on Chinese imports is more likely at this stage. Trump has also promised a 25% tariff on all goods from Mexico and Canada, targeting illegal immigration and drug smuggling into the US. He has further warned that he will close the US market to BRICS nations if they try to create an alternative to the greenback or move away from using it.
Interestingly, US monetary authorities have long been fighting inflation, with the Federal Reserve maintaining its benchmark interest rate at a 20-year high of 5.25% to 5.5%. However, Trump criticized Federal Reserve Chairman Jerome Powell for being indecisive on interest rates. Despite these ongoing differences, Trump stated that he would not push for Powell's early departure from the post.
