US Implements Highest Tariffs in Over a Century at 22.5%

President Trump announced a blanket tariff of 10% affecting around 60 countries, leading to an effective tariff rate estimated between 22.5% and 30%, the highest in a century. The calculation by the Trump administration was based on a simplistic estimation of the trade deficit divided by exports.

The economic impact includes:

Short-term: US real GDP growth in 2025 expected to decline by 0.9% to 1.0%
Long-term: Permanent reduction in US economy size by 0.3% to 0.6%, equating to annual losses of $90 billion to $180 billion
Price increases: Overall price levels projected to rise by 2.1% to 2.6%, with consumer losses per household ranging from $3,400 to $4,200; food prices may increase by 3.7%

Analyst Neil Dutta raised recession probability to 89%, indicating significant economic uncertainty ahead.