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Consumption is America’s Achilles’ heel in a trade war

Consumption is America’s Achilles’ heel in a trade war

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US household budgets are so stretched that relatively small price increases cause a reduction in spending. That already is clear from consumer response to rising oil prices.

 

If the Trump administration’s tariffs on Chinese and other imports turn into noticeable price increases, consumer spending could crumple in a matter of months, and US economic growth could fall to close to zero from an estimated 2.8% to 4% for the second quarter.

Source: Consumption is America’s Achilles’ heel in a trade war

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