Tariffs Could Return by July—But Rate Cuts May Be Needed Even Sooner

Reimposing Section 301 tariffs would increase import costs for goods from targeted countries. Higher import costs could be passed on to consumers in the form of higher prices for certain goods. U.S. Treasury Secretary Scott Bessent stated that Section 301 tariffs could be reimposed at previous levels by early July. The U.S. Supreme Court ruled President Trump’s retaliatory tariffs unlawful earlier this year. In response, the Trump Administration imposed a 10% tariff on various countries under Section 122 of the Trade Act. Section 301 of the Trade Act allows the U.S. to impose additional tariffs in response to unfair trade practices. A rate cut would reduce borrowing costs for consumers and businesses. The Fed’s benchmark rate is currently held at 3.50–3.75%. Bessent argued that core inflation, excluding food and energy, is falling. Falling core inflation creates room for the Federal Reserve to cut its benchmark interest rate. Lower borrowing costs would support consumer spending and business investment.