While consumers have been largely shielded from the immediate price hikes expected from the latest round of U.S. tariffs, a period of reckoning may be approaching, according to top economist Mohamed A. El-Erian.
Tariff-Related Price Increases Could Be Felt Unevenly Across Economy
In a recent analysis, El-Erian argues that the real impact of the tariffs—what some critics have labeled a direct “tax” on Americans—has been delayed, not dismissed, and is poised to be felt unevenly across the economy.
The central mystery of the new tariff regime has been the absence of a significant, widespread spike in consumer prices. El-Erian explains that a combination of strategic corporate decisions and inventory management has created a temporary buffer.
Why Have Consumers Not Felt The Pressure Yet?
Erian explains that many foreign exporters and U.S. importing companies initially chose to absorb the tariff costs within their profit margins rather than risk losing market share over what they hoped might be a temporary policy. This absorption was the first line of defense for the American consumer’s wallet.
Further softening the blow, …