U.S. president Donald Trump announced that he would impose reciprocal tariffs on the nation’s trading partners on 13 February, prompting numerous trade experts to predict higher prices for American consumers.
Shortly after Trump announced the measures, Capital Economics, a global financial analytics firm, told the New York Times that it “predicts that the effective tariff rate on all U.S. imports could rise from less than 3 percent now to around 20 percent.” The effective tariff rate is the percentage of the price of imported goods that goes toward paying tariffs.
The firm said it expects that a dramatic increase in the effective tariff rate would add “roughly 2 percent to consumer prices, meaning that inflation would temporarily rebound to 4 percent later this year.”
Another trade expert who spoke to the Times, Cornell professor Eswar Prasad, called the proposals “a declaration of an all-out trade war against practically all major U.S. trading partners.”
Asked by a member of the press pool whether prices would go up after signing the order, Trump said “not necessarily.”
Though he acknowledged that price increases were possible in the short term, he said that reciprocal tariffs would ultimately force manufacturers to avoid costly tariffs by building plants in the U.S., creating jobs in the process. Howard Lutnick, Trump’s commerce secretary nominee, said that the new tariffs could be implemented by 2 April.
In a 13 February release responding to the President's announcement, National Retail Federation (NRF) Executive Vice President of Governmental Relations David French said, “while we support the president’s efforts to reduce trade barriers and imbalances, this scale of undertaking is massive and will be extremely disruptive to our supply chains."
French emphasized the NRF's long-standing position that tariffs will hurt American consumers, saying that the proposed measures"will likely result in higher prices for hardworking American families and will erode household spending power."
“The University of Michigan monthly consumer sentiment index continues to decline, suggesting consumers are alarmed about trade war uncertainty," he also noted.
The NRF and Hackett Associates, which together produce the monthly Global Port Tracker report, said in a 7 February release that importers can continue to expect import cargo rates to remain high for the foreseeable future. The U.S. ports covered by Global Port Tracker brought in a total of 25.5 million 20-foot equivalent units (TEUs) in 2024, the largest amount since 2021, when the pandemic prompted record imports.
NRF Vice President for Supply Chains and Customs Policy Jonathan Gold said that uncertainty is fueling the bustling import market.
“Supply chains are complex,” he said.
Many importers were rushing merchandise into the country before tariffs took effect, Gold explained.
“Retailers continue to engage in diversification efforts. Unfortunately, it takes significant time to move supply chains, even if you can find available capacity," Gold said.
Gold warned supply chain stakeholders to expect “increased challenges because of added warehousing and related costs.”
Both Gold and Hackett Associates Founder Ben Hackett said that they were most concerned about the long-term effects of tariffs. Both also suggested that they expected the administration's tariff plans to change rapidly as Trump achieved some of his foreign policy goals.
“At this stage, the situation is fluid, and it’s too early to know if the tariffs will be implemented, removed, or further delayed,” Hackett said.
U.S. shrimpers have pushed for higher tariffs on foreign shrimp as the industry has grappled with historically low prices and landings. The Southern Shrimp Alliance has successfully pushed for duties on foreign shrimp in the past, and said more tariffs would help the domestic industry.
“The absence of any tariffs on foreign shrimp has played a huge role in the dominance of imports in our market,” the SSA said in a release.
