Washington, Apr 4 (EFE). – United States President Donald Trump’s announcement of widespread tariffs has not only caused international concern but also raised alarms on Friday about possible inflation in the US and even sparked a backlash within the Republican Party.
On Wednesday, Trump imposed global tariffs of 10% on all imports, with higher taxes in specific cases such as China at 34% and the European Union at 20%.
Industry experts such as JPMorgan and Fitch Ratings predicted that the new tariffs would lead to higher consumer prices and a possible economic recession.
Fed worried about persistent inflation
Federal Reserve Chairman Jerome Powell said Friday that the tariffs will translate into slower economic growth and higher inflation, which could become persistent.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent, “ said Powell at a conference in Arlington, Virginia.
“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to through fully to prices,” he added.
The Fed chairman stressed that “while uncertainty remains elevated, it is now clear that the tariff increases will be significantly larger than expected. The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”
At its last meeting on Mar. 19, the Fed left interest rates unchanged at a range of 4.25% to 4.5%.
Trump on Friday urged the Fed to cut rates, saying: “This would be the PERFECT time.”
“He is always “late,” but he could now change his image, and quickly. Energy prices are down, Interest Rates are down, Inflation is down, even Eggs are down 69%, and Jobs are UP, all within two months – A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!”!” said Trump on his social media platform, Truth Social.
Powell insisted the Fed would wait for more information before acting.
Republicans reluctant on tariffs
Republican Senators Rand Paul (Kentucky) and Ron Thilis (North Carolina) openly rejected the White House’s tariff policy, warning that it jeopardizes grassroots in the 2026 midterm elections.
“The truth is that tariffs are taxes. They don’t punish foreign governments; they punish American families,” Paul wrote on an op-ed colum, highlighting an argument that has also been used by the Democratic party.
Former Senate Republican leader Mitch McConnell said, “Tariffs are bad policy, and trade wars with our partners hurt working people the most.”
Texas Senator Ted Cruz also expressed his reluctance, saying: “I’m not a fan of tariffs. Tariffs are a tax on the American people,” adding that he hoped the policy would lead to lower levies for American goods in other countries.
Sen. Ron Johnson of Wisconsin – where Republicans lost a state judicial election this week – expressed cautious nervousness.
“I’m concerned, the stock market is very concerned…I don’t have the president’s strongly held belief that this is something that absolutely has to be done,” Johnson said.
On Wednesday, shortly after Trump announced the tariffs, the Senate ed a resolution to try to freeze a levy already imposed on Canada.
Four Republicans, McConnell, Paul, and moderates Susan Collins and Lisa Murkowski ed their Democratic colleagues in greenlighting the bill.
California tries to avoid tariffs’ blowback
California Gov. Gavin Newsom, a Democrat, announced Friday that he would seek to expand the state’s international trade alliances to avoid the impact of the tariffs.
“To our international partners: As the fifth largest economy in the world, the Golden State will remain a steady, reliable partner for generations to come, no matter the turbulence coming out of Washington,” the governor said.
Newsom said he has ordered agreements be sought with other countries to ensure California is exempt from retaliatory tariffs stemming from the escalating trade war.
It is unclear how the measures announced by Newsom will work, or if they will.
California is a major exporter in sectors such as agriculture and manufacturing and is home to several ports, and more Fortune 500 companies than any other state.
Newsom will also seek new trading partners to bolster the state’s economy, which currently s more than 675 billion dollars in bilateral trade, according to the governor’s office.
California relies heavily on trade with Mexico, Canada, and China, with more than 40% of its imports coming from these countries, ing for 203 billion dollars of the state’s more than 491 billion dollars in imported goods in 2024.
Following the announcement, White House spokesman Kush Desai dismissed the governor’s plan.
“Gavin Newsom should focus on California’s out-of-control homelessness, crime, regulations, and unaffordability instead of trying his hand at international trade,” he said. EFE
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