The Multilayered Impact of Trump's Tariffs on the U.S. Economy

Fabrizio Panetta, a member of the ECB Governing Council and Governor of the Bank of Italy, has made important remarks about the serious impact of tariff policies currently facing the U.S. economy. Through comprehensive economic analysis, it has become clear how tariffs are burdening the entire U.S. economy.

The Structure of Tariffs Seen from Foreign Exporters’ Losses

According to Panetta’s analysis, foreign exporters are suffering approximately a 10% loss due to the tariffs imposed. However, this is only the initial impact of the tariffs. The majority of the tariff burden is ultimately absorbed within the U.S. economy. In the early stages, U.S. companies bore the main responsibility for this burden, absorbing the tariff costs through compressed profit margins.

The Gradual Shift of Burden to Consumers

Over time, it becomes clear that companies cannot continue to bear all the costs. Eventually, some of these costs begin to be passed on to consumers. Currently, about half of the tariff burden falls on ordinary consumers. In other words, while it may appear that foreign producers are suffering losses on the surface, in reality, both U.S. companies and consumers are paying the price.

Pathways to Inflation Acceleration and Economic Ripple Effects

These tariff measures are not just a matter of corporate profits. They also impact overall economic indicators, with estimates suggesting tariffs increase the U.S. inflation rate by more than 0.5 percentage points. While this may seem small at first glance, it directly affects consumers’ purchasing power and increases living costs. As a result, the U.S. economy continues to face compounded pressures from tariff policies.