A Silver Lining, but…

The customs tariffs imposed on imported goods by President Donald Trump on April 2 will, according to some estimates, bring the average US tariff higher than after the infamous Smoot-Hawley tariffs of 1930 (see “President Trump’s Mindless Tariffs Will Cause Economic Havoc,” The Economist, April 3, 2025). As these tariffs are a tax on American consumers—that is, will typically translate into a corresponding price increase of consumer goods in America—the impact on the cost of living will be significant.