Troubling Tariffs

Existing tariffs on Chinese imports and Chinese retaliatory tariffs reduce US GDP by 0.15 of a point. Last week’s tariff increase from 10% to 25% on $200 billion of Chinese goods will decrease GDP by another 0.15. A further 25% tariff on another $325 billion of Chinese imports would lower GDP by half a point. All told, an added hit of -0.65 of a point. Painful, but not recession inducing.