Tariffs May Grind Down US GDP by 40-50 bps

The tariffs on Indian goods is expected to weigh on the US economy, pushing up inflationary pressures and impacting growth, according to a report by the State Bank of India (SBI).

- ANI

The report said that US GDP could be affected by 40-50 basis points due to the new tariffs, while the economy is also likely to face higher input cost inflation.

"We believe that U.S. tariffs are likely to affect US GDP by 40-50 bps along with higher input cost inflation," the report noted.

The report highlighted that signs of renewed inflationary pressure have already started emerging in the US, mainly due to the pass-through effects of the recent tariffs and a weaker dollar.

It also flagged that import-sensitive sectors such as electronics, automobiles, and consumer durables are feeling the impact most sharply.