“Disinflation should now dominate the headlines,” says Jamie Cox, managing partner at Harris Financial Group.
Import prices to the US fell in March, helping to reduce energy costs ahead of new US tariffs.
On a 12-month basis, import prices rose 0.9%.
Imported fuel prices fell 2.3%, falling to the largest month of the month since a 7.2% decline in September. The decline in oil and natural gas prices has driven this trend significantly.
Non-fuel imports rose 0.1% for the second consecutive month, offset by lower prices of cars and consumer goods. This increase was due to the high costs of capital goods, industrial goods and materials, food, feed and beverages.
Export prices remained unchanged in March after the jump upward revision of 0.5% in the previous month.
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US export prices rose 2.4% year-on-year.
The agricultural export price index remained flat, while the non-agricultural transport index fell 0.1%. Additionally, export prices for finished goods such as capital goods, automotive vehicles, consumer goods, industrial machinery, computers and chips rose in March.
Price data is further evidence that inflation is slower than presidential tariffs take effect.
“We should be dominating the headlines right now, but no one is paying attention. The potential inflation shock wave covers all other data,” said Jamie Cox, managing partner at Harris Financial Group, in an email to the Epoch Times.
Financial markets have been shaken by concerns that higher US government import tariffs will update inflationary pressures and threaten the outlook for economic growth.
Trade tolerance
Recent actions by President Donald Trump show that his trade agenda may be flexible. Trump has allowed almost all U.S. trading partners to suspend a 90-day suspension on higher mutual tariffs. However, China still faces a 145% tariff rate on all goods that enter the US.
Businesses and consumers may have sighed at Relief after it was confirmed that a wide range of foreign electronic products, such as laptops, smartphones, semiconductors and televisions, are now exempt from customs duties.
However, Commerce Secretary Howard Lutnick said the tariff exemption on electronic devices is temporary. These items will instead be subject to upcoming semiconductor tariffs, he said.
Commerce Secretary Howard Lutnick will speak to a White House reporter on April 9, 2025. Travis Gillmore/The Epoch Times
“All of these products will come under the semiconductor. Those products will have special focus type duties for reuse,” Lutnick said in an interview with ABC “This week.”
“So what Trump is doing is saying he’s exempt from mutual tariffs, but they’re probably included in the semiconductor tariffs coming in a month or two, so these will come soon.”
The “customs” debate continues
Because tariffs operate with delays, it may take some time for potential impacts to appear in the data. Still, many voices have expressed concern that these taxes will lead to higher prices as they grow slower.
In minutes after the Federal Reserve policy meeting in March, he highlighted public and private concerns that the economy faces the opposite risks to inflation and growth. This results in a volatile, non-winning system, as policymakers navigate the economic situation and decide on the next policy action.
The Fed had not changed in the 4.5% range from 4.25% in March. Futures Market expects the US Central Bank to suspend its rate-cut cycle at its May meeting. Investors are hoping to cut points in their benchmark federal funding rates for June for the next quarter, according to the CME FedWatch tool.
Federal Reserve Chairman Jerome Powell, who appeared at a meeting of business journalists, said Trump’s comprehensive tariff plans are likely to increase inflation.
“While tariffs are likely to generate at least a temporary increase in inflation, the impact could also be more sustained,” Powell said.
“We expect the inflationary effect of higher tariffs to be temporary, but the impact on production and employment will last long and could be a key factor in determining a proper monetary policy attitude.”
Top Trump administration officials have repeatedly pushed back to the notion that these tariffs fuel inflation.
Treasury Secretary Scott Bescent told CBS’s “Face the Nation” last month.
“They’ll eat the tariffs that follow,” he said.
Peter Schiff, chief economist and global strategist at Europacific Asset Management, says there are two tariff outcomes
“Or alternatively, consumers can accommodate higher tariff prices by reducing the purchase of these items. Money not spent on imports is spent on goods and services supplied domestically, and the price of those items will be higher. In that case, they will rise as all prices rise.”
Consumers were worried about inflation
Consumer inflation expectations have been escalating over the last few months, and market watchers are concerned that this could penetrate the wider economy.
“The bottom line is that consumers are very weak in emotions, and the fear is that this will lead to weaker actual spending,” Torten Sloek, chief economist at Apollo Management, said in a note to the Epoch Times.
Retail sales data for March was released on April 16th, with consensus estimates suggesting a 1.3% increase.
