US tariffs are negatively effecting US economy
(MENAFN) The recent escalation of U.S. tariffs on multiple countries is having widespread negative effects on the American economy. Rather than strengthening domestic industries, the measures have introduced instability, increased operating costs for businesses, and raised prices for consumers, according to various reports.
Current economic indicators point to a slowdown in the nation’s performance. As highlighted by recent global economic forecasts, the U.S. growth projection for this year has been downgraded by 0.9 percentage points, now standing at 1.8 percent — the sharpest decline among developed nations.
Financial markets are also feeling the strain. In April alone, the U.S. dollar index dropped more than 4.5 percent, consistently dipping below the 100-point mark. Meanwhile, long-term government bonds are facing mounting pressure, with the yield on 30-year Treasury bonds surpassing 5 percent — a figure not seen in nearly 20 years.
The country’s industrial sector is facing similar challenges, experiencing a slowdown due to rising costs. Industrial production decreased by 0.2 percent in May compared to the previous month. Additionally, the Manufacturing Purchasing Managers' Index for April fell to 48.7, marking the lowest reading in five months and signaling contraction in the sector.
The consequences are particularly pronounced in industries like automotive manufacturing. Domestic car dealers are dealing with limited supply and inflated prices. Forecasts by S&P Global Mobility indicate a projected reduction of around 1.28 million vehicles in North American production this year. Simultaneously, U.S. auto sales are expected to decline by roughly 700,000 units.
Overall, the intended benefits of tariff hikes appear to be undermined by the broad and deep disruptions they are causing across key areas of the economy.
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