A new analysis predicts a roughly 2-4.5% increase in U.S. factory costs as a result of President Donald Trump’s tariff policies, the Associated Press reports. The findings come from research conducted by Chris Bangert-Drowns at the Washington Center for Equitable Growth.
Seemingly small changes at factories with slim profit margins, he said, “could lead to stagnation of wages, if not layoffs and closures of plants” if costs are unmanageable.
The analysis, released Tuesday, highlights the challenges Trump may face in trying to sell his tariffs to the public as a political and economic triumph. The success of his policies ultimately depends on whether everyday Americans become wealthier and factory towns experience revivals — which someeconomists have maintained is unlikely.
A survey released in June by the Atlanta Federal Reserve suggested that companies would on average pass half of their tariff costs onto U.S. consumers through higher prices. According to Labor Department data, America lost 14,000 manufacturing jobs after Trump rolled out his April tariffs.
