Citigroup: Trump's 90-day tariff delay may not be as helpful as it sounds
After President Trump announced a 90-day suspension of reciprocal tariffs on over 75 countries, U.S. stocks experienced historic gains. However, despite the boost to the market, not everyone believes that the economic turmoil has ended. Citigroup warned that the suspension of tariffs may only provide short-term relief. In a recent report sent to clients, Citigroup stated, "The suspension of reciprocal tariffs that do not include China does not mean that the U.S. economy has avoided a slowdown in growth and rising inflation." The investment bank emphasized that a broader trade war still exists. The 10% baseline tariff, combined with an additional 125% tariff on most Chinese goods and tariffs on specific industries, has raised the average effective tariff in the U.S. by about 21 percentage points since the beginning of this year. Citigroup added that trade-related uncertainties are far from over. As Chinese imports continue to be heavily taxed, this could put pressure on U.S. economic growth in the second quarter. Therefore, Citigroup pointed out that the Federal Reserve is expected to cut interest rates in May or June
According to the Zhitong Finance APP, after President Trump announced a 90-day suspension of reciprocal tariffs on over 75 countries, U.S. stocks experienced historic gains. However, despite the boost to the market, not everyone believes that the economic turmoil has ended. Citigroup warned that the suspension of tariffs may only provide short-term relief. In a recent report sent to clients, Citigroup stated, "The suspension of reciprocal tariffs that do not include China does not mean that the U.S. economy has avoided a slowdown in growth and rising inflation."
The investment bank emphasized that a broader trade war still exists. The 10% baseline tariff, combined with an additional 125% tariff on most Chinese goods and tariffs on specific industries, has raised the average effective tariff in the U.S. by about 21 percentage points since the beginning of this year.
Citigroup added that trade-related uncertainties are far from over. As Chinese imported goods are still subject to heavy tariffs, this could put pressure on U.S. economic growth in the second quarter. Therefore, Citigroup pointed out that the Federal Reserve is expected to cut interest rates in May or June