Trump Tariffs Raise US Import Costs, Shrink Economy, Widen Trade Deficit

President Donald Trump's administration has significantly increased U.S. tariffs, raising the average effective tariff rate to 18.2%, the highest since 1934, which has boosted government revenue but is projected to shrink the U.S. economy overall. While the administration has negotiated trade agreements with the European Union, United Kingdom, Vietnam, Indonesia, and Japan to reduce some tariffs, targeted industry-specific tariffs remain, impacting sectors like automobile manufacturing, which has led to job losses and financial hits for companies such as Volkswagen and General Motors. Supporters argue tariffs are necessary to counteract unfair trade practices, especially with countries like China, and to bring manufacturing jobs back to the U.S., although the increased costs are expected to gradually raise prices for consumers over 6 to 18 months. Leading U.S. companies, including Procter & Gamble and Nestlé, have already announced price increases on household goods in response to higher import costs, signaling that American consumers are beginning to feel the impact. Internationally, countries like Lesotho are experiencing economic difficulties due to these tariffs, highlighting the global repercussions of U.S. trade policies. Singapore's Deputy Prime Minister Gan Kim Yong has explained that the tariffs serve multiple purposes such as generating revenue, balancing trade, and protecting specific sectors, reflecting complex motivations behind the administration's trade strategy.