UBS: Trump's Delay in Tariff Increase Postpones Consumer Pressure Until 2026

According to UBS chief economist Paul Donovan, Trump's decision to delay the tariff increase until August 1st may mean that the impact of these new tariffs on prices will not fully manifest before Christmas, but will be postponed until 2026. Donovan pointed out that since retailers typically stock up for Christmas in advance and the entire supply chain process from production to shelving takes time, even if tariffs are implemented now, consumers may not truly feel the price increase until later. This will undoubtedly ease some of the impact on American consumers in the second half of the year. Avoiding the cost pressure of tariffs during the year-end shopping season is beneficial for the White House to avoid negative news. However, Donovan also warned that any delay cannot completely prevent these tariffs from eventually being passed on to American households. He stated, 'This is actually a huge tax burden imposed on American consumers. By the end of this year, real wages adjusted for inflation will begin to decline rather than rise, and that's when we will see the real problems start to emerge.'

Related Articles