US consumers bear high costs as expanded tariffs take effect

The US's expanded tariffs on steel and aluminum imports took effect on Monday, following the Trump administration's decision to double levies to 50 percent and extend them to hundreds of derivative products.

The US Department of Commerce announced in the Federal Register on Friday that the Bureau of Industry and Security has added 407 product codes to the US Harmonized Tariff Schedule. These products will be subject to additional tariffs due to their steel and aluminum content.

Since February 1, when Trump kicked off trade wars by imposing tariffs on imports from Mexico, Canada, and China, at least 333 companies worldwide have reacted to the tariffs in some manner, as of August 12, according to a Reuters tracker.

A Goldman Sachs research team estimated that US consumers had borne 22 percent of the tariff burden by June. If the current trajectory continues, the share borne by American consumers could climb to as high as 67 percent by October, Reuters cited the bank as saying.

Fresh government data reinforced those concerns. The US Department of Labor reported on Thursday that the producer price index (PPI) rose 0.9 percent month on month in July. Prices rising at the fastest monthly pace since June 2022. On an annual basis, the headline PPI rose 3.3 percent. The data signals rising inflationary pressures in the upstream supply chain, with tariff effects beginning to feed through.

Brooke Masters, US managing editor of the Financial Times, told MSNBC that the data presents an early warning shot, and warned that the Fed is facing a much more difficult situation. 

"This could very easily be the beginning of the tariffs showing up."