{"id":74872,"date":"2025-08-21T12:26:48","date_gmt":"2025-08-21T19:26:48","guid":{"rendered":"https:\/\/lapost.us\/?p=74872"},"modified":"2025-08-21T12:26:48","modified_gmt":"2025-08-21T19:26:48","slug":"tariffs-are-freezing-the-us-economy-warns-stanford-economist","status":"publish","type":"post","link":"https:\/\/lapost.us\/?p=74872","title":{"rendered":"Tariffs Are Freezing the US Economy, Warns Stanford Economist"},"content":{"rendered":"
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By<\/span>Sunita Sohrabji<\/a><\/div>\n<\/div>\n<\/div>\n
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\u201cMuch of this is self-inflicted. If we turn the page on tariffs by locking them in or by rolling them back, I think the economy would slowly start to recover. But there’s been no signals of Trump changing his tune.\u201d \u2014 Stanford economist Dr. Neale Mahoney.<\/p>\n<\/div>\n<\/div>\n

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Jason Leung photo via Unsplash (copyright free image)<\/figcaption><\/figure>\n<\/div>\n<\/div>\n
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\u00a0American consumers are feeling the burden of President Donald Trump\u2019s global tariffs plan, both at the checkout counter and in the labor market.<\/p>\n

\u201cTariffs are a tax on consumer goods, and in particular for goods like clothing, electronics, coffee, furniture, and toys,\u201d said Dr. Neale Mahoney, Director of the\u00a0Stanford Institute for Economic Policy Research. \u201cAs we head into the Christmas shopping season, we expect to see fairly large price increases,\u201d said the Stanford professor of economics, while speaking at an Aug. 15 news briefing hosted by American Community Media.<\/p>\n

Trump\u2019s sweeping plan \u2014 which he is still negotiating with several countries after announcing the initiative April 2 \u2014 imposes an average 15.8% tariff across the board. Some countries, such as China, Brazil, Canada, and India,\u00a0face far higher tariffs<\/a>. India and Brazil currently have been slapped with 50% levies, largely punitive, while China faces a 145% tariff on goods \u2014 except certain high-end electronics \u2014 unless it can successfully negotiate with Trump before November. The president has also increased tariffs on Canada, an ally, from 25% to 35%.<\/p>\n

Price Increases<\/h2>\n

Mahoney noted that the US imports about 10% of its consumer goods. He predicted that consumers would overall see a 1.5% rise in prices. \u201cThe effects are meaningful, but not catastrophic. But prices overall are moving in the wrong direction.\u201d<\/p>\n

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American consumers are going to feel the heavy weight of\u00a0#Trump<\/a>\u00a0#Tariffs<\/a>\u00a0as consumer prices rise and social safety nets are cut, says\u00a0@Stanford<\/a>\u00a0economist Dr.\u00a0@nealemahoney<\/a>\u00a0of\u00a0@SIEPR<\/a>. The only beneficiaries are folks invested in AI stocks, he says.\u00a0pic.twitter.com\/zZwC0Ie20I<\/a><\/p>\n

\u2014 American Community Media (@AmCommMedia)\u00a0August 21, 2025<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

The economist noted that Trump had inherited an economy that was \u201cthe envy of the world.\u201d But the uncertainty of not knowing where tariffs are going to spike next has squandered that advantage, he added.<\/p>\n

\u201cIn 2024, the economy grew at 2.5%. This year, it\u2019s growing at 1.2%, half that amount. Last year, consumer spending was driving the economy growing at 3%. This year, consumer spending is flatlined as consumers are sitting on the sideline. Inflation was decreasing last year. Now it\u2019s picking up. We haven\u2019t seen a large increase in unemployment, but we could be heading in that direction,\u201d said Mahoney.<\/p>\n

Labor Market Cooling<\/h2>\n

Employers are holding back and not replacing employees as they leave. Firms are holding back on new hiring. \u201cWhile we\u2019ve seen pockets of layoffs, we haven\u2019t seen widespread layoffs yet. I hope we avoid them. But the sequence we\u2019ve seen in the past is first firms hold back on hiring, and then there\u2019s layoffs next,\u201d said Mahoney.<\/p>\n

\u201cThe strength in the economy right now \u2014 to the extent there is \u2014 is the stock market, in particular, people who are invested in these \u2018magnificent seven\u2019 AI-focused stocks. For many other Americans, I think we\u2019re already seeing warning signs. Prices are increasing. It\u2019s harder to find jobs.\u201d<\/p>\n

\u201cThe bill that was passed this summer looks to make massive cuts in Medicaid and in food stamps. The Affordable Care Act exchanges that many small business owners and other working and middle-class people rely on for coverage are facing huge premium increases, which are going to squeeze budgets further. So this is a very difficult time, with higher prices, worse labor market prospects, and a social safety net that is being frankly shredded by Republicans in Congress and the Trump administration,\u201d said Mahoney.<\/p>\n

Rolling Back Tariffs<\/h2>\n

\u201cThe good news is that much of this is self-inflicted. If we turn the page on tariffs by locking them in or by rolling them back, I think the economy would slowly start to recover. I think the bad news is there\u2019s been no signals of Trump changing his tune.\u201d<\/p>\n

\u201dInstead, the strategy seems to be just to distract from the economy with the stunts we\u2019re seeing in Washington, D.C., and to bury some of the less flattering data,\u201d said Mahoney. \u201cThis environment we\u2019re in, where tariffs are on again, off again\u2026 I understand that the administration frames this as the art of negotiation, but it\u2019s really freezing the economy in troubling ways.\u201d<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

BySunita Sohrabji Aug 20, 2025 \u201cMuch...<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11,9,5],"tags":[],"class_list":["post-74872","post","type-post","status-publish","format-standard","hentry","category-business","category-opinion","category-world"],"_links":{"self":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/74872","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=74872"}],"version-history":[{"count":1,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/74872\/revisions"}],"predecessor-version":[{"id":74873,"href":"https:\/\/lapost.us\/index.php?rest_route=\/wp\/v2\/posts\/74872\/revisions\/74873"}],"wp:attachment":[{"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=74872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=74872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lapost.us\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=74872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}