Higher Tariffs Worsen Economic Woes, Inflation Risks For U.S

Bloomberg Economics estimates that if all threatened reciprocal tariffs take effect, the average duty on U.S. imports could rise to around 20%—a sharp jump from just under 3% before President Trump’s inauguration in January 2025.

Recent moves saw the world’s two largest economies ease tit-for-tat tariffs and relax export controls.

That increase could heighten inflation and slow economic growth, Catherine Lucey, Ben Holland, Ben Otto, Soo-Hyang Choi, and Meghashyam Mali reported for Bloomberg News.

So far, the Trump administration has reached deals with the UK and Vietnam and agreed to tariff truces with China. These moves saw the world’s two largest economies ease tit-for-tat tariffs and relax export controls.

Asked whether more agreements were forthcoming, Trump replied, “We have a couple of other deals, but you know, my inclination is to send a letter out and say what tariffs they are going to be paying.”

He added, “It’s much easier. I’d rather just do a simple deal where you can maintain it and control it.”

Trump recently announced a deal with Vietnam, saying the U.S. would impose a 20% tariff on Vietnamese exports and a 40% tariff on goods believed to be transshipped through Vietnam—a reference to the practice of routing components from countries like China through third-party nations to avoid tariffs.

While those rates are lower than the initial 46% tariff Trump had threatened on Vietnam, they are still higher than the universal 10% rate initially proposed.

The exact details of the agreement remain unclear. The White House has not yet published a term sheet or proclamation codifying the deal, and Vietnam has stated that negotiations are still ongoing—indicating no final deal has been reached.