Inflation pressure in the U.S. is easing, but the impact of tariffs has not yet been observed. Forecasters are warning of potential price increases in May or June.

Taiwan • Business • 05/14 02:25
Inflation pressure in the U.S. is easing, but the impact of tariffs has not yet been observed. Forecasters are warning of potential price increases in May or June.

April inflation data in the U.S. indicates that the annual growth rate has dropped to 2.3%, marking a four-year low, which is below expectations. However, economists believe that the Trump administration's high tariff policies have not yet been fully reflected in prices, due to companies stockpiling inventories and the lagging effects of tariffs. The impact is expected to become evident in May or June. Federal Reserve officials remain cautiously watchful of future price trends, and the market is closely monitoring upcoming data to assess the impact of tariffs.

Key Updates

13h ago

Jim Cramer, a financial commentator, says Walmart shows resilience amid the pressure of US-China tariffs.

Well-known financial commentator Jim Cramer mentioned on CNBC that despite the high tariffs imposed by the United States on Chinese goods, Walmart and two unnamed retailers remain competitive. Walmart reported earnings of 61 cents per share in the first fiscal quarter of 2025, which exceeded expectations. Walmart tackled tariff pressures by adjusting its product mix and maintaining supply chain flexibility. Its advertising and subscription services offer additional revenue streams, with approximately two-thirds of its products being sourced from the United States, which helps reduce the impact of import tariffs.

16h ago

U.S. and China Reach Tariff Agreement: Talks in Geneva Lead to Substantial Tariff Reductions, Alleviating Pressure on U.S. Consumers and Finances

In the middle of May 2025, during high-level talks in Geneva, Switzerland, the US and China reached an agreement on tariffs, temporarily easing the trade tensions that had been ongoing since early April. The US reduced tariffs on Chinese goods from 145% to 30%, while China reduced tariffs on US goods from 125% to 10%. This 90-day agreement aims to alleviate pressure on US consumers and financial market volatility, and create room for further bilateral trade negotiations.

05/15 04:56

The tariff truce between the US and China has caused a 300% increase in container bookings between the US and China, and Hapag-Lloyd anticipates continued growth in volume.

On May 12, 2025, the United States and China reached a 90-day tariff ceasefire agreement, substantially lowering punitive tariffs, resulting in a rebound in the trans-Pacific shipping market. According to Vizion data, container bookings for imports from China to the U.S. surged by nearly 300% within a week after the agreement took effect. Hapag-Lloyd reported that bookings on U.S. routes increased by 50% compared to the same period the previous week, and transportation demand is expected to continue rising in the coming weeks, reflecting the swift release of trade demand that had been stifled by high tariffs.

05/14 18:27

Revealing the Share of Chinese-Made Products in the US Market: Dependence on Imports Ranging from Everyday Items to Home Appliances

Data from the United States International Trade Commission and the Department of Commerce shows that even amid U.S.-China trade tensions and high tariffs, China remains one of the major sources of imports for the United States. In 2024, a significant portion of home goods imported by the U.S. were made in China, including 90% of cookware, 66% of tableware, and 87% of refrigerators. As of March 2025, China was the third-largest source of imports for the U.S., with total imports exceeding $1030 billion. Despite the impact of tariffs, China's leading position in the U.S. market remains unshaken, indicating the U.S.'s dependence on Chinese manufacturing.

05/14 15:25

US and China Announce 90-Day Tariff Ceasefire; The $6.5 Trillion in US Treasury Bonds Maturing in June Attracts Market Attention

On May 14, 2025, following the economic and trade talks between the US and China in Geneva, the announcement of a 90-day tariff truce was made. The US will lower tariffs on Chinese goods from 145% to 30%, and China will reduce tariffs on US goods from 125% to 10%. The US's $6.5 trillion national debt is due to mature in June, raising concerns in the market about the risk of default. Experts believe the chances of a US debt collapse are low but advise investors to monitor exchange rate fluctuations and risks related to capital flows.

05/14 10:59

US and China Reach a Temporary Tariff Agreement, Beijing Lifts Ban on Boeing, Market Reacts with Caution

On May 14, 2025, the US and China reached a 90-day agreement on tariffs in Geneva, agreeing to significantly lower punitive tariffs. The Chinese government subsequently lifted the ban on receiving Boeing aircraft, allowing the resumption of deliveries and easing Boeing's delivery crisis in the Chinese market. However, experts note that the core issues of the trade war remain unresolved, and businesses still face uncertainty.

05/14 02:25

Inflation pressure in the U.S. is easing, but the impact of tariffs has not yet been observed. Forecasters are warning of potential price increases in May or June.

April inflation data in the U.S. indicates that the annual growth rate has dropped to 2.3%, marking a four-year low, which is below expectations. However, economists believe that the Trump administration's high tariff policies have not yet been fully reflected in prices, due to companies stockpiling inventories and the lagging effects of tariffs. The impact is expected to become evident in May or June. Federal Reserve officials remain cautiously watchful of future price trends, and the market is closely monitoring upcoming data to assess the impact of tariffs.

05/14 01:54

CNBC commentator Jim Cramer breaks down the effects of Trump's temporary tariff delay policy on the market's rebound.

Former President of the United States, Donald Trump, announced a temporary suspension of new tariff measures on China and other trade partners, which led to a market rebound. CNBC commentator Jim Cramer analyzed this policy reversal, pointing out that tech stocks benefited and market expectations were disrupted. Cramer described it as a "game of chicken without any winners," posing risks for short-term traders and highlighting the subtle interaction between policy and the market. This move might be intended to avoid an economic slowdown caused by tariffs, which could impact the Federal Reserve's ability to lower interest rates. The tariff pressure on businesses has been temporarily eased, and limited market supply and strong earnings reports also contributed to the stock market rebound.

05/14 01:54

U.S. inflation dropped to 2.3% in April, easing concerns over stagflation and leading to expectations of interest rate cuts.

According to data released by the U.S. Department of Labor on May 13, 2025, the annual CPI increase rate for April dropped to 2.3%, the lowest level since February 2021, which was below the expected 2.4%. The core CPI annual increase rate stayed at 2.8%, meeting expectations. This data shows that inflation has been slowing for three consecutive months, raising market expectations for a Federal Reserve interest rate cut, temporarily easing the risk of stagflation. However, uncertainty surrounding tariff policies could still impact future inflation trends.

05/13 15:24

China-US Reach 90-Day Tax Reduction Agreement: Toy Industry Benefits, Trump's New Drug Pricing Policy Gains Attention

On May 12, 2025, the US and China reached a 90-day "tariff reduction agreement" in Geneva, where US tariffs on Chinese goods were reduced from 145% to 30%, and Chinese tariffs on US goods were reduced from 125% to 10%. This agreement temporarily halts the trade war and is beneficial to the US toy industry, though the risk of price fluctuations still exists. On the same day, Trump signed an executive order to promote the "most favored nation pricing" policy for pharmaceuticals, mandating that pharmaceutical companies reduce US drug prices to align with those in other developed nations, which drew significant attention from the pharmaceutical industry.

April Inflation Data Falls Short of Expectations, Temporarily Easing Market Pressure

According to data released by the U.S. Department of Labor, the annual growth rate of the Consumer Price Index (CPI) in April 2025 was 2.3%, lower than March's 2.4% and below the market expectation of 2.5%. This marks the lowest annual increase since February 2021. The monthly growth rate was 0.2%, higher than March's -0.1%, but still below the expected 0.3%.

Energy prices decreased by 3.7% annually, with gasoline prices down 11.8% and fuel prices down 9.6%. Food prices increased by 2.8% annually, slightly slowing from March's 3%. Housing costs maintained an annual growth rate of 4%. The core CPI (excluding food and energy) had an annual growth rate of 2.8%, unchanged from March, with a monthly growth rate of 0.2%, slightly below the expected 0.3%.

Despite the data showing reduced inflationary pressure, Federal Reserve Chairman Jerome Powell stated at a press conference that tariff policies might delay the return of inflation to the 2% target, noting, "Over the next year, we might not achieve progress on our inflation and employment targets."

Frequent Changes in Tariff Policies, Businesses and Consumers Still Adapting

In early April, the Trump administration announced a new round of tariffs on global imports, raising the average tariff rate to its highest point in nearly a century. Tariffs on Chinese goods once reached as high as 145%, but after U.S.-China negotiations on May 13, both sides agreed to temporarily lower tariffs for 90 days, with U.S. tariffs on Chinese goods reduced to an average of 30% and Chinese tariffs on U.S. goods reduced to 10%.

Additionally, the U.S. adjusted its tariff policy on small parcels from Hong Kong, Macau, and China, reducing the value-added tax rate from 120% to 54% and canceling the planned increase in specific duties. While these policy changes help reduce logistics costs and consumer burdens, they have not completely eliminated market concerns about future price fluctuations.

According to The New York Times, many importers had stocked up before April to avoid high tariffs, resulting in April retail prices not yet reflecting the new tariff costs. Basic Fun CEO Jay Foreman stated that upon hearing the news of tariff reductions, he immediately contacted suppliers to arrange shipments, indicating businesses' high sensitivity to policy changes.

Forecasters: Price Pressure May Emerge in May or June

Several economists point out that the impact of tariffs on inflation is lagging. Michael Gapen, Chief Economist at Morgan Stanley, stated that most goods on retail shelves were imported months ago and do not yet reflect the new tariff costs. Rick Rieder, Chief Investment Officer of Fixed Income at BlackRock, noted that the impact of tariffs on prices might intensify in the summer.

J.P. Morgan strategist Meera Chandan also believes that although recent inflation data is moderate, the full impact of tariff policies has not yet manifested, and upward pricing pressure is expected in the coming months. Bank of America analysts noted that some imported goods in the April CPI, such as household items, pharmaceuticals, and toys, have shown signs of accelerated price increases, possibly indicating the initial effects of tariffs.

According to a survey by the Federal Reserve Bank of Cleveland, businesses expect the annual price growth rate to rise to 3.9% in the coming year. Federal Reserve officials stated they will continue to monitor the impact of tariffs on inflation and economic growth and are not in a hurry to adjust interest rate policies in the short term.

Tariff Policies' Impact on Supply Chains and Consumer Behavior Still Unfolding

Beyond pricing, tariff policies also impact supply chains and business decisions. According to The Guardian, many manufacturers and retailers have stockpiled goods before the tariffs took effect, with some companies choosing to absorb costs themselves to avoid passing them on to consumers. The National Retail Federation (NRF) pointed out that in the 2024 fiscal year, 72% of goods entering the U.S. through parcels under $800 came from Chinese e-commerce platforms, and policy adjustments may accelerate industry reshuffling.

Additionally, according to The Wall Street Journal, the Trump administration's tariff policies have increased supply chain uncertainty, with importers and logistics providers facing scheduling pressures. Gene Seroka, Executive Director of the Port of Los Angeles, stated that the 90-day tariff suspension period is tight for the logistics industry, making it difficult to significantly increase import volumes.

Federal Reserve Remains Cautious, Market Focuses on Future Data

Even though April's inflation data fell below expectations, the Federal Reserve has not changed its policy stance. According to NBC News, Federal Reserve officials noted at their latest meeting that economic uncertainty has further increased, and tariff policies may raise unemployment and inflation risks.

The Federal Reserve's preferred inflation indicator, the Personal Consumption Expenditures Price Index (PCE), will be released on May 30, and the market will closely watch whether the data shows further tariff impacts on prices.

References

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