American consumers are only a few weeks old to feel the main impacts of President Donald Trump's prices at the cash register, according to the former Chief Economic Advisor Gary Cohn.
In an interview with CBS, Cohn provides that the effects of the prices newly imposed on China will begin to collapse in the American economy in late May.
“The cycle of a property sold in China, loaded on a ship, sailed through the ocean, unloaded in the United States, put in a factory and distributed to a shelf is about eight weeks in the United States,” he told the CBS Nation on Sunday.
Cohn, who led the National Economic Council for a year during the first Trump administration, is now vice-president of IBM, having previously been the chief of the Goldman Sachs operation.
He said that with prices on China in force on April 2, the real point of pain for consumers should emerge “in the past two weeks of May”.
Already, American buyers have rushed to avoid increases in potential price in purchases of front loading of large ticket items such as cars, washing machines and electronics.
“We have seen auto sales almost every record time,” said Cohn, “because they are trying to avoid prices.”
Trump's prices will fully hit consumers in the coming weeks, said Cohn. Andrew Thomas / Middle East images via AFP
While recent hard data, such as profits for the first quarter, have so far shown strength, Cohn has stressed that softer data, such as consumer confidence surveys, are starting to flash warning signs.
“You are starting to see much more weakness in survey data,” said Cohn, noting that major brands consumer, including ChipotlePepsico and the luxury giant LVMH, warned of sales in the second quarter.
Prices should strike particularly difficult small businesses. Toys retailers, for example, are already struggling with a rate of 145% on the goods they normally order for the holiday season. Many reveal orders or potential closures, said Cohn.
Last week, logistics experts and the initiates of the maritime transport industry echoes similar concerns, telling Business Insider that they expect major disruptions at the prices and availability of goods in the coming weeks.
Four even warned that the stress of the uncontrolled supply chain could trigger higher inner unemployment, instability of the global market and an increase in geopolitical tensions.
The situation aggravates the situation in reservations of maritime container between China and the United States, down 64%, the Treasury Secretary, Scott Bessent, told investors at a JPMorgan conference last week.
Cohn also warned that the prices are “highly regressive”, affecting the low -income Americans disproportionately who spend a larger share of their income on basic goods.
While Trump has launched the possibility of new tax reductions targeting households earning less than $ 200,000 to compensate for higher costs, Cohn was skeptical about the chronology, saying that it would be “very fast” for everything that is significant by the end of May.
With the upward economic uncertainty and no American-Chinese Commerce Active, Cohn has clearly indicated: the economic turbulence linked to the prices has only just begun.
