Inflation in the USA fires with Trump’s tariff

Inflation has again accelerated in the United States in June and already reflects the impact of the tariff war led by Donald Trump. The consumer price index rose 0.3% in the month and reached 2.7% in twelve months – the highest level since February.

The high, focused on fuels, food, toys and appliances, follows the transfer of costs caused by tariffs on products imported from China, Mexico, the European Union and Brazil.

US companies have begun to readjust prices in strongly dependent on imports, such as retail and the construction industry. Items such as refrigerators, clothes and orange juice became more expensive, signaling the first effects of Trump’s tariff.

The President imposed overwhelms of up to 50% over more than 20 countries, under commercial and political justifications – in the Brazilian case, with explicit attacks on the Lula administration.

Raising prices reinforces the risk of stagflation in the US economy: persistent inflation combined with loss of economic dynamism. With inflation core also high, the Federal Reserve can maintain the interest rate on the current level and postpone any measure of monetary relief.

Inflationary pressure expands in sectors sensitive to tariffs

The up 2.7% increase in the annual consumer price index in June was accompanied by new increases in various sectors and the acceleration of nucleus inflation, which reached 2.9%. In the month, prices rose 0.3%, against 0.1% in May.

According to economists, the advance is concentrated precisely into categories more exposed to the tariffs imposed by the US government.

Appliances, for example, were high of 1.9% – higher monthly variation since 2020. items such as refrigerators, ovens and washing machines incorporated the effects of expanded tariffs on steel, aluminum and derivative products.

Toys, with strong dependence on Chinese imports, rose 1.4% for the second consecutive month – a typical leap of exceptional inflation periods.

It also recorded significant increases the clothing sectors (+0.4%), sports goods (+1.4%) and video equipment (+4.5%). The index of “recreational goods”, which includes audio and video items, rose 0.8% – double the average of previous months.

These categories, historically stable or deflating, now reflect the effects of the new trade policy.

In supermarkets, fruits and vegetables rose 0.9%, and foods such as coffee and orange also had price pressure. There are evidence that discharge reaches imports from strategic business partners such as Mexico, Canada and Brazil, even though data by origin is not discriminated against in official indices.

Brazilian products enter the list and rate of 50% healates conflict with the USA

Although the impact on prices is still partial, Brazil is among the countries most directly affected by the US tariff offensive. Items such as orange juice, steel, aluminum and appliances already appear among the pressed sectors, with the 50% rate – the highest of the new round – about to take effect on August 1st.

Trump’s decision exposes a direct attack on Brazilian sovereignty, as reaffirmed by Lula government authorities and business entities. In recent pronouncements, the Republican admitted that he decided to tax Brazil “because he can” and justified the measure with political arguments, even mentioning Jair Bolsonaro’s trial in the Supreme Court.

In addition to ignoring the fact that the US has been commercial surplus with Brazil for 16 years, the letter sent by Trump to President Lula has unacceptable requirements: it would only retreat in the fare if Brazilian companies would produce within the US. In case of retaliation, it threatened to impose even more severe rates.

The National Confederation of Industry (CNI) and agribusiness representatives warned that the measure threatens jobs and exports. The Brazilian government published the decree of the reciprocity law and indicated that it will not ask the fee to postpone, but will seek ways to face it politically and economically. The clash, besides being commercial, is deeply geopolitical.

Inventories run out and price increase should continue in the coming months

Most increases observed in June still represent only the beginning of tariff effects. Many major retailers had stocked products before the new rates were entry into force, which postponed the pressure on consumer prices. These stocks, however, have been running out. New orders already operate under the new tariff regime.

Economists heard by Reuters and by CNN They project that the impact of tariffs should grow throughout the second half. Wells Fargo’s Sarah House said that although the goods represent only 25% of the CPI core, they are enough to pull the perception of inflation up. Heather Long, from Navy Federal, compared the current moment to the “first round” of a longer game: what was seen in June can only be the beginning of a continuous climb.

Items such as furniture, clothing, domestic utilities and imported foods should continue to rise. The window and floors rate jumped 4.2% – record since 1999 – and tools and hardware rose 0.7%, reversing months of falling. The new price logic even changes sectors that came from a stable cycle, and consolidates inflation as one of the biggest challenges for the US economy.

With the effects of tariffs added to climate pressures on agriculture, inflation tends to stay above the Fed’s goal. The combination of external shocks and internal factors draws a scenario of inflationary continuity that can affect both domestic consumption and import flows.

Stagflation returns to the center of the economic debate

The possibility of a scenario of stagflation – high inflation with stagnant growth – has returned to worry analysts and investors. With increasing prices and the job market locked outside niches such as health, signs of slowdown are increasingly visible. Trump’s tariff policy is pointed out as the main risk factor in this picture.

Despite public pressure for interest rates, the Federal Reserve maintains cautious posture. Boston Fed President Susan Collins warned that tariffs should boost prices and reduce growth and employment. June inflation reinforces this reading and should remove immediate decisions of monetary flexibility.

The impact focuses on the American middle class, which already feels the effects of real income loss. “The real estate market is frozen, the job is locked, and some relief in September would be useful. But the data do not justify it yet,” Long said. Meanwhile, Trump minimizes impacts and maintains the political use of trade policy.

With pressured consumers and retaliation trading partners, the tariff war is no longer just an economic strategy to consolidate itself as a mechanism of political domination. In the case of Brazil, this means facing a frontal attack on its sovereignty – with repercussions that go far beyond trade balance.