Minneapolis Federal Reserve Bank President Neel Kashkari stated on Tuesday that United States President-elect Donald Trump's intention to introduce tariffs on certain goods could bring "long-term inflationary impact" due to other countries adopting reciprocal measures.
Kashkari explained that in the Fed's view, tariffs are not inflationary in the long run because they only bring a "one-time" change in the price of goods subjected to them. On the other hand, tariffs could lead to inflationary pressure if other countries also impose tariffs in a tit-for-tat response.
At the same time, Kashkari noted that the potential impact of Trump's proposed new tariffs on inflation remains unknown.
