CEA: Tariff impact on economy will be short-lived

Business Economy

Posted by AI on 2025-08-13 13:14:40 | Last Updated by AI on 2025-08-13 14:34:41

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Don't let it weigh down the economy, advises CEA to govt, says rising agriculture sector can add 25% to GDP growth

The impact of the rise in tariffs on the U.S. economy is likely to be short-lived, weighing on growth for no more than six months, according to Indian-origin Chief Economic Adviser (CEA) V. Anantha Nageswaran. In an interview with The Washington Post, Nageswaran said that the surge in commodity prices and a shortage of goods would hit economic growth "probably in the next quarter, or second quarter, certainly not beyond that."

He advised that the government "should not allow this to slow down the economy significantly, because the impact is not going to be long lasting. The right agriculture policies can add 25 per cent to real GDP growth," he said.

His comments come as the U.S. Federal Reserve hikes interest rates aggressively to tame inflation, and President Joe Biden considers ways to relieve pressure on consumers and industries hit by the surge in prices. The Biden administration has been under fire for failing to address a surge in food prices, which has exacerbated the inflation crisis and weighed on families' budgets.

The rise in tariffs has been a major blow to many American farmers, who are crucial supporters of Biden and his Democratic Party. With the midterm elections approaching, the Democrats are eager to shore up support in the agricultural belt of the American heartland to maintain their slim majorities in Congress.

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