Trump's tariffs raise inflation, shrink income, U.S. analysis reveals

WASHINGTON, March 5 (Xinhua) -- The Trump administration's recent tariff policy would drive inflation upward by a full percentage point and see about 1,600 U.S. dollars in disposable income wiped away annually from the average U.S. household, a U.S. think tank revealed.

The price level in the United States is estimated to rise by 1.0 to 1.2 percent, equivalent to a consumer loss of 1,600 to 2,000 dollars per household on average in 2024 dollars due to U.S. President Donald Trump's tariffs imposed on Canada, Mexico and China, according to an analysis released by the Yale Budget Lab on Monday.

The analysis said that tariffs are a regressive tax, especially in the short run, which means that tariffs burden households at the bottom of the income ladder more than those at the top.

It also said that the real U.S. GDP growth will be 0.6 percentage points lower in 2025, and in the long run, the U.S. economy will be persistently 0.3 to 0.4 percent smaller, the equivalent of 80 to 110 billion dollars annually in 2024 dollars.