Jeanne Whalen

So it really depends where you're sitting.

Welcome to The Journal, our show about money, business, and power.

I'm Ryan Knudson.

It's Friday, December 19th.

Coming up on the show, a 2025 economy health check.

All right, let's start with tariffs.

The Trump administration imposed massive tariffs in the spring and said that it would lead to a manufacturing renaissance.

And critics, meanwhile, worried that it could lead to increased inflation and slow down the economy.

So we are now eight months in from when Trump announced these back in April.

Gene, what have the effects actually been so far?

And the effects have been far more mild so far than many economists and consumers were expecting.

I think everyone thought when Trump started really hiking tariffs up very quickly in his term,

that we were going to have runaway inflation, we were going to have even goods shortages over the summer.

What we've actually seen, while the effective tariff rate overall is quite a bit higher now than it was at the beginning of the year, still that hasn't fed through to prices as much as everyone was expecting.

Why?

Why is that?

I mean, there are a lot of theories.

One is that, first of all, Trump has rolled back some of the tariffs, right?

He ratcheted them way up on China and then brought them back down and then ratcheted them up again and brought them back down.

The administration has exempted some goods from paying the tariffs, so they're not quite as broad brush as initially feared.