It’ll be a response to all the uncertainty because of the president’s on-again, off-again tariffs that’ll only cost people more money, he wrote—calling tariffs “a misapplied consumption tax on households and businesses that will soon cause a premature and unnecessary end to economic expansion.”
What comes next? Hotter inflation and increasing unemployment, according to Brusuelas.
“The price of those policies will be first paid at the ports and then spread to the rest of the economy,” Brusuelas wrote, noting Seroka’s prior comments on an anticipated drop in imports, totaling more than a third of typical cargo traffic. What does come in will cost more, and that will mean higher prices for consumers, Brusuelas explained. Not to mention, less traffic could mean a decline in dockworkers, truckers, and others’ earnings—and later, an increase in unemployment among supply-chain-related occupations.
“This has all the markings of yet another trade shock, resulting in a loss of employment and household income that will push the U.S. economy into recession,” he wrote. Brusuelas pointed to other recent occasions that disrupted supply chains and resulted in a plunge in container shipments to the Los Angeles and Long Beach ports, and subsequent economic damage: a trade war in 2018, the 2020 pandemic, and China’s 2022 zero-COVID policy.
