Tariffs will hurt U.S. more than many other economies, modelling suggests

The latest revised tariffs from the Trump administration will reduce the United States' annual GDP by 0.36 percent, worse than many other countries and regions, according to modelling released on Sunday.

U.S. President Donald Trump signed an executive order on July 31 to modify the reciprocal tariff rates. 

In dollar terms, the modelling suggests the new tariffs will reduce the U.S. annual GDP by $108.2 billion. Most other economies will feel an impact as well, but to a lesser extent than the United States: China's GDP is forecast to be reduced by $66.9 billion, the EU's by $26.6 billion and Japan's by $3.9 billion.

The modelling, conducted by Niven Winchester, professor of economics at Auckland University of Technology, examines the impact of the new tariffs on more than 10 countries and regions. It uses a global model of goods and services markets, covering production, trade and consumption. Retaliatory tariffs are not considered in the analysis.

The U.S. economy faces challenges over the medium term as well, according to a blog posted by the UK's independent research institute, the National Institute of Economic and Social Research (NIESR), on Monday.

By 2030, the current U.S. import tariffs could reduce global GDP by 1.1 percent compared to a non-tariff scenario, according to the NIESR. Mexico (-3.5 percent), Canada (-2.7 percent) and the U.S. (-2.5 percent) are forecast to be among the most impacted economies. 

Tariffs are not the only reason for increased uncertainty over the U.S. economy, the institute suggests. Domestic policies, which relate to deporting illegal immigrants particularly, could significantly impact the U.S. labor market. The rise in U.S. government debt has also raised concerns about economic and financial stability over the medium term.

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