UBS: Tariffs Act as 'Significant Tax Increase' on US Consumers

UBS economists reveal that current tariff policies are acting as a significant tax increase on American consumers, slowing economic growth and fueling persistent inflation. The weighted-average tariff rate has surged to 13.6%, translating to a tax on imports equivalent to 1.2% of the nations total economic output. This increase could add 0.8 percentage points to core inflation in 2026, keeping inflation stubbornly high at around 3.5%. Looking further ahead, tariffs could have a cumulative impact of nearly 1.9 percentage points on core inflation through 2028, potentially accounting for almost two-thirds of the remaining gap between current inflation rates and the Federal Reserves target of 2%. This situation is particularly challenging for most households, who are less equipped to handle rising costs now than they were a couple of years ago.The Daily News Now! — Every city. Every story. AI-powered. Hosted on Acast. See acast.com/privacy for more information.