US biz and consumers bracing to take hit as tariffs to drive up costs

From an ice cream parlour in California to a medical supply business in North Carolina to a T-shirt vendor outside Detroit, US businesses are bracing to take a hit from the taxes President Donald Trump imposed Saturday on imports from Canada, Mexico and China -America's three biggest trading partners.

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The Budget Lab at Yale University estimates that Trump's tariffs would cost the average American household $1,000 to $1,200 in annual purchasing power.

Gregory Daco, chief economist at the tax and consulting firm EY, calculates that the tariffs would increase inflation, which was running at a 2.9% annual rate in December, by 0.4 percentage points this year. Daco also projects that the US economy, which grew 2.8% last year, would fall by 1.5% this year and 2.1% in 2026 "as higher import costs dampen consumer spending and business investment".