U.S. economy will collapse by 2026 on Trump’s tariffs
Posted: Wed Nov 20, 2024 8:00 pm
Donald Trump’s proposed tariffs will throw the U.S. economy into chaos by 2026. Morgan Stanley’s chief global economist, Seth Carpenter, says these tariffs are a surefire way to drive up inflation and tank growth.
The plan is to slap a 10% to 20% tariff on all imports and hike up to 100% on goods coming in from China. Trump says it’s all about “extracting funds” from other countries. Economists say it’s more like slashing your own tires and calling it a shortcut.
Carpenter predicts a “big negative shock” if these tariffs hit all at once. Speaking at Morgan Stanley’s Asia Pacific Summit, he warned that even a gradual rollout would choke the economy over time.
“Tariffs are a drag on growth for the U.S., not just the countries targeted.” According to Carpenter, 2025 will see the start of the fallout, but by 2026, the damage will be impossible to reverse.
How the tariffs will wreck everything
If Trump adds his tariffs to the ones Joe Biden already has in place, the U.S. economy will be hit on multiple fronts. Industries like cars, consumer electronics, machinery, construction, and retail will see prices surge. And no, companies won’t eat the extra costs—they’ll hand those right to the consumer.
Take Trump’s proposed 60% tariff on Chinese goods. Pair that with Biden’s 100% tariff on electric vehicles from China, and you’ve got a recipe for disaster in the auto industry.
Higher import costs will bleed into companies like Apple and Microsoft, which depend on global supply chains. The ripple effect? Price hikes on phones, computers, and pretty much everything else you buy.
The consumer price index ticked up 2.6% in October from the previous year, slightly more than September’s 2.4%. Inflation is slowing after years of chaos, but if Trump’s tariffs land, say goodbye to that progress.
The Federal Reserve has been cutting rates to keep the economy alive. Tariffs could undo all that work, warns Ben Emons, founder of FedWatch Advisors. Markets might even price out rate cuts entirely in 2025 if inflation spikes again. Growth will slow, interest rates will freeze, and the economy could spiral.
https_www.msn.com/?url=https%3A%2F%2Fwww.msn.com%2Fen-us%2Fmoney%2Fmarkets%2Fu-s-economy-will-collapse-by-2026-on-trump-s-tariffs-says-morgan-stanley%2Far-AA1uq3hF%3Focid%3Dmsedgntp%26pc%3DLCTS%26cvid%3D5b6b97d34dcc4129ae99adadb1f1f54f%26ei%3D40
The plan is to slap a 10% to 20% tariff on all imports and hike up to 100% on goods coming in from China. Trump says it’s all about “extracting funds” from other countries. Economists say it’s more like slashing your own tires and calling it a shortcut.
Carpenter predicts a “big negative shock” if these tariffs hit all at once. Speaking at Morgan Stanley’s Asia Pacific Summit, he warned that even a gradual rollout would choke the economy over time.
“Tariffs are a drag on growth for the U.S., not just the countries targeted.” According to Carpenter, 2025 will see the start of the fallout, but by 2026, the damage will be impossible to reverse.
How the tariffs will wreck everything
If Trump adds his tariffs to the ones Joe Biden already has in place, the U.S. economy will be hit on multiple fronts. Industries like cars, consumer electronics, machinery, construction, and retail will see prices surge. And no, companies won’t eat the extra costs—they’ll hand those right to the consumer.
Take Trump’s proposed 60% tariff on Chinese goods. Pair that with Biden’s 100% tariff on electric vehicles from China, and you’ve got a recipe for disaster in the auto industry.
Higher import costs will bleed into companies like Apple and Microsoft, which depend on global supply chains. The ripple effect? Price hikes on phones, computers, and pretty much everything else you buy.
The consumer price index ticked up 2.6% in October from the previous year, slightly more than September’s 2.4%. Inflation is slowing after years of chaos, but if Trump’s tariffs land, say goodbye to that progress.
The Federal Reserve has been cutting rates to keep the economy alive. Tariffs could undo all that work, warns Ben Emons, founder of FedWatch Advisors. Markets might even price out rate cuts entirely in 2025 if inflation spikes again. Growth will slow, interest rates will freeze, and the economy could spiral.
https_www.msn.com/?url=https%3A%2F%2Fwww.msn.com%2Fen-us%2Fmoney%2Fmarkets%2Fu-s-economy-will-collapse-by-2026-on-trump-s-tariffs-says-morgan-stanley%2Far-AA1uq3hF%3Focid%3Dmsedgntp%26pc%3DLCTS%26cvid%3D5b6b97d34dcc4129ae99adadb1f1f54f%26ei%3D40