Trump’s Tariffs: Here’s What Economists Think Will Happen After the 90-Day Pause
Written by
Kerra Bolton
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Amber Barkley
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As the 90-day tariff pause comes to a close, economists are watching closely to see what direction the Trump administration takes. The outcome will shape everything from inflation to job growth in the coming months.
GOBankingRates talked to economists to uncover what they think will happen after the 90-day pause on tariffs.
An Economic Fork in the Road
The end of the tariff pause could mark a pivotal moment for the U.S. economy.
Wayne Winegarden, an economist at the Pacific Research Institute, said the decision will either stabilize fragile conditions or worsen the slowdown already underway.
“Remember, significantly higher tariffs are now being implemented, meaning costs for many goods and services will be increasing soon,” Winegarden said. “Just how bad the environment gets depends on how the pause ends.”
He added that the pause will likely be extended, given progress on trade deals.
“If this is the case, then the environment will not get worse,” he explained. “However, should the pause end with a reversion to the full tariff rates that the president announced, then the economic headwinds will increase significantly, leading to even greater job and income losses.”
Key Indicators To Watch
While the tariff timeline unfolds, economists said they are keeping a close eye on the data. The next few months could reveal whether the economy is weathering the pressure or slipping into contraction.
“The second quarter GDP report in a few months will be very telling,” Winegarden said. “The Q1 GDP report was very disappointing, and if the 2025 Q2 report also indicates that the economy contracted, then this will be an ominous sign.”
He said consumer spending trends and manufacturing output are indicators to watch in the meantime for clues as to how tariffs are impacting the economy.
Sector Shocks Ahead
Tariffs increase the cost of imported goods, forcing retailers to either raise prices for consumers or absorb costs, impacting profitability, especially for small businesses. Sectors relying heavily on imports from affected countries like China will likely see significant disruption.
From automakers to almond growers, several industries are bracing for higher costs, supply disruptions and potential job losses tied to shifting trade dynamics.
“The auto industry is already facing specific tariffs — e.g., 25% on cars, steel, aluminum — and could see further cost pressures, and potential exemptions or adjustments are being discussed,” said Tracy Shuchart, senior economist at NinjaTrader. “Additionally, increased tariffs on those raw materials and downstream products will raise costs for manufacturers using them.”
Shuchart said farmers in states like California and the wine industry could face retaliatory tariffs from Canada and China, affecting exports.
“Higher costs for imported supplies like glass bottles are also a concern,” Shuchart said. “Major ports like Los Angeles and Long Beach anticipate reduced cargo volumes due to decreased imports, potentially impacting related jobs in logistics and transportation.”
Uncertainty Could Chill Growth
Beyond short-term spending and trade data, Winegarden said a volatile policy environment could shake business confidence. If companies hesitate to invest due to uncertainty, the ripple effects could deepen the economic impact of the trade war.
“The idea that business growth requires long-term planning and [that] the volatile and uncertain policy environment makes planning much more difficult are long-term effects that are being overlooked,” Winegarden said. “Should the willingness of companies to invest in the U.S. economy really start to falter, then the economic consequences from the trade war could start expanding significantly.”
A Potential Silver Lining
While the end of the tariff pause could bring higher costs and global supply chain disruptions, some economists saw a potential upside.
“The end of the pause may lead to cost increases and global supply chain disruptions. Still, it could also accelerate domestic manufacturing investment and incentivize greater economic self-reliance, as seen in the U.S. CHIPS Act response to prior trade tensions,” said Sean Jasso, a practitioner of economics at Pepperdine University’s Graziadio Business School.
In addition, there could be long-term gains to offset short-term pains for consumers.
“Consumers may experience short-term price hikes and fewer choices for imported goods, but could also benefit from improved product quality, job growth and increased innovation tied to renewed domestic industrial policy,” Jasso said.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
- Wayne Winegarden, Pacific Research Institute
- Tracy Shuchart, NinjaTrader
- Sean Jasso, Pepperdine University
