• Treasury Secretary Scott Bessent claims tariffs have not caused long-term harm, despite rising consumer costs and GDP slowdown.
  • U.S. effective tariff rate hits 22.5%, the highest in over a century, with apparel prices surging 17%.
  • Lower-income households bear the brunt, facing annual losses up to $1,700, while trade tensions escalate with China and others.

Bessent’s Defense Amid Economic Strain

Treasury Secretary Scott Bessent doubled down on the Trump administration’s aggressive tariff policy, stating that "what we've seen so far is that tariffs haven't hurt" during a recent address. His remarks come as the U.S. effective tariff rate climbs to 22.5%—the highest since 1909—following an 11.5 percentage point hike in April. While Bessent framed the measures as "transitory," independent analyses project lasting economic damage, including a 0.9 percentage point drag on 2025 GDP growth and $3,800 in annual household costs.

Consumer Pain and Sectoral Shocks

Lower-income households are disproportionately affected, with losses ranging from $980 to $1,700 per year. Apparel prices have jumped 17%, squeezing budgets for essentials. "The math doesn’t add up for working families," said one retail industry analyst, speaking anonymously due to the sensitivity of ongoing trade talks. Meanwhile, businesses face rising input costs, with some textile manufacturers reportedly scaling back production.

Global Fallout and Political Calculus

China retaliated with 34% tariffs on U.S. imports, while Switzerland seeks to avoid escalation through negotiations. The administration’s "reciprocal" strategy has divided economists, with some praising its focus on domestic industry and others warning of a Smoot-Hawley-style spiral. Market volatility persists, with the Dow shedding 450 points last week on tariff uncertainty. Behind the scenes, sources suggest Bessent may be "reassessing the political calculus" as midterm elections approach.

Correction: An earlier version misstated the projected GDP impact as 1.2 percentage points; it is 0.9 percentage points.