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The impact of the huge import duty imposed on many countries around the world by US President Donald Trump is now clearly visible on the pockets of American consumers. According to Bloomberg report, in July, there was a slight but significant increase in inflation in the US. The retailers are gradually involving increased tariffs on imported goods, which is increasing the burden of spending on the common consumer.

Increased prices of these things

In Bloomberg's survey, economists estimate that the Core Consumer Price Index (CPI) rose 0.3% in July, compared to 0.2% in June. This is considered to be the fastest monthly increase after the beginning of this year. Core CPI does not include food and energy prices. Cheap petrol, while handling the total inflation rate, limited the headline CPI to 0.2% in July. But the effect of tariff has started appearing in the prices of domestic decoration and entertainment related items. The inflation of the core service sector is currently stable, but experts believe that the impact of the tariff will be deeper in the coming months.

New dilemma for Federal Reserve

It is now a challenge before the US central bank Federal Reserve to assess whether increased tariffs can maintain inflation for a long time while keeping the interest rates stable. In the midst of indication of lethargy in the labor market, many companies are looking for measures to avoid pouring a complete burden of tariffs on sensitive consumers on prices. July is expected to have a good increase in retail sales data, which has contributed to online sales such as encouragement on vehicle sale and Amazon Prime Day. However, experts warns that this strength may be superficial, as the actual income growth declined in June.

50% tariff applied to India

The temporary trade ceasefire between the US and China is about to end soon, but the Trump administration has already taken a tough stand on India. Angered over continuing oil purchases from Russia on a large scale, Trump put 25% tariff on India and then 25% tariffs. In this way, a total of 50% custom duty has come into force, which is the highest tariff ever imposed by the US on a major trading partner.

With this step, India's exporters, especially the James and Jewelery Industry are expected to suffer a huge shock. The US is a major market for Indian jewelery and 8085% production from Mumbai's Seepz SEZ is exported to the US. This area employs around 50,000 people. Experts are warning that this tariff will weaken India's export competition and it can also affect GDP growth.