Unintended consequences

The U.S. President imposes tariffs to shrink the trade deficit and encourage Americans to buy domestic products. The outcome? The U.S. trade deficit for goods surged to a record $153 billion in January 2025. Surprised? Not really—U.S. buyers are rushing to import foreign goods before the tariffs take effect. The likely next steps: a slowdown in imports and rising inflation as businesses are forced to source higher-priced domestic alternatives. At ECP, we remain convinced that trade disruptions ultimately hurt global economic growth as their impact deepens.