WASHINGTON, D.C. (RFD News) — President Trump’s trade policy remains in focus as economists continue tracking the impact of tariffs on the U.S. economy.
Doireann Fitzgerald, an economist with the Federal Reserve Bank of Minneapolis, said the U.S. economy has held up better than many expected despite tariffs.
“The U.S. economy isn’t very open, so coming into this episode, imports were, let’s say, 14% of GDP, so there are economies out there that are much more open. That’s one thing, which is not to say that these don’t have a distortive effect. The second thing that I think is very important to keep in mind is that we’re going through a simultaneous shock, which is this AI boom. That’s both driving imports and also headline numbers in terms of investment.”
The Minneapolis Fed said it has been studying federal reports over the past four months and found tariffs are contributing to inflation, but they are only one part of the broader inflation picture.
Economists said artificial intelligence is also putting upward pressure on prices while driving investment across the economy.
