The imposition of steep US tariffs on imports is expected to weigh on household consumption and economic growth in the near-term, while offering limited relief to select domestic industries such as steel, according to GlobalData, a leading data and analytics company.
GlobalData’s Macroeconomic Outlook reveals that the US GDP growth is forecast to slow to 2.0% in 2025 and further to 1.9% in 2026, compared to 2.8% in 2024. Real household consumption expenditure is projected to grow at a slower pace of 2.2% in 2025, reflecting increased economic uncertainty and the inflationary impact of tariffs on consumer goods, particularly imported automobiles.
Gayatri Ganpule, Economic Research Analyst at GlobalData, comments: “The new tariffs introduced in early April 2025 have triggered a wave of market volatility and investor concern. The S&P 500 fell by 4.8% following the announcement, while the US dollar weakened. Although the tariffs aim to protect domestic manufacturing and reduce trade imbalances, they are likely to fuel inflation by increasing the cost of imported goods, notably vehicles and auto parts, which are essential household expenses.”
The 25% tariff on foreign-manufactured automobiles is expected to directly contribute to a rise in the Consumer Price Index (CPI), which could constrain the Federal Reserve’s ability to ease interest rates. This may result in prolonged higher borrowing costs, further pressuring consumer confidence and investment momentum. However, certain industries have seen positive impacts.
The domestic steel sector, for example, has experienced a surge in benchmark hot-rolled coil prices, up more than 30% since January 2025, leading to stronger performance for firms like Nucor and Steel Dynamics. Moreover, the Congressional Budget Office anticipates $800 billion in customs revenue over the next decade.
Ganpule concludes: “While the broad-based tariffs present significant economic risks, targeted measures have provided a lifeline to struggling industries. Striking the right balance between domestic industry protection and inflation management will be critical for sustaining long-term economic stability in the US. GlobalData