Although a 90-day pause was decreed for some reciprocal tariffs, the increase to 125% on tariffs on Chinese products took effect immediately, under the correct argument that China has shown a "lack of respect" toward global markets.
The consumer price index showed a significant drop thanks to the economic policies implemented by the Republican government
Although a 90-day pause was decreed for some reciprocal tariffs, the increase to 125% on tariffs on Chinese products took effect immediately, under the correct argument that China has shown a "lack of respect" toward global markets.
Additionally, specific tariffs remain on key industries such as steel, aluminum, and the automotive sector, as well as additional measures directed at Mexico and Canada regarding fentanyl trafficking.
President Trump defended his policy vigorously, declaring April 2 as "Liberation Day," marking the beginning of his strategy to "revive the American industry". In his words, this date "will be forever remembered as the day the destiny of the United States was reclaimed."
The Federal Reserve, meanwhile, has adopted a cautious stance. The FED chairman, Jerome Powell, stated that "it is too early to determine the appropriate path for monetary policy," emphasizing that the tariffs will likely generate temporary increases in inflation, although he doesn't rule out more lasting effects.
The report from the Consumer Price Index (CPI) for March showed a significant slowdown in inflation in the United States, being a great encouraging sign.
The uncertainty following the recent wave of tariffs driven by the trade war initiated by China, seems to dissipate as these trade measures begin to take effect.
According to data from the Bureau of Labor Statistics, the CPI increased by 2.4% compared to the same month of the previous year, below the 2.8% recorded in February and exceeding economists' expectations, who predicted a rise of 2.5%. On a monthly basis, prices fell by 0.1%, the first decrease since May 2020, in contrast to the 0.2% increase of the previous month.
Regarding the core CPI, which excludes food and energy due to their volatility, prices increased by 0.1% monthly, less than the 0.2% in February and below the expectations of 0.3%. On an annual basis, core prices increased by 2.8%, the smallest rise since March 2021.
This was the second consecutive month of slowdown in both overall and core inflation, which was initially well received by the markets.
The leader recently announced a tariff package that includes a general 10% tax on most imported products, effective since last weekend.