Trump 'tariff bomb' is self-inflicted...In the end, it's for negotiation.

"Consumer price growth next year to reflect Trump tariffs is 0.75%"
Yale University's "loss of purchasing power of 1.4 million won per household"
The 'tariff bomb' is a direct hit to the price of automobiles
The price of the car 'Mexico and Canada 25% tariff' rises by 4.2 million won.

[Anchor]
Concerns around the world are growing as U.S. President-elect Donald Trump forewarned a "tariff bomb" even before he took office.

However, it is analyzed that it is virtually impossible for such a 'tariff bomb' to be actually dropped.

Reporter Kwon Young-hee reports.

[Reporter]
The side effect of tariffs is inflation above all else.

The U.S. consumer price increase rate next year, estimated by Yale to reflect Trump's tariff plan, is 0.75%.It means that the purchasing power will be lost by 1,000 dollars per

household and 1.4 million won in our money.

Strong inflation makes it difficult to lower the benchmark interest rate, forcing American families to suffer from high lending rates.

[Shanna Orchik Sissel / CEO of Banion Capital Management: Tariffs may have a negative impact on inflation and prices. That's enough to happen.]

The price increase is expected to be noticeable in automobiles.

U.S. automakers rely on Canada and Mexico to produce finished vehicles and procure parts.

If 25% tariffs are imposed on the two countries, car prices will rise by an average of $3,000 and 4.2 million won.Rising prices

reduce demand, leading to lower sales and employment, and creating a crisis for the automotive industry.

[Mary Lovely / Peterson Institute for International Economics] It says that vehicles must cross the border more than seven times before they can be released. This is a fully integrated supply chain.]

Tariffs are also bad news for U.S. exports such as agricultural products.

It is easy to be targeted for retaliatory tariffs by the other party.

Even during the first Trump administration, countries subject to high tariffs imposed retaliatory tariffs mainly on products from strong Republican areas.

With such a clear headwind, many view Trump's tariff bomb as a bluff.

[Steven Rickito / Chief Economist at Mizuho Securities: There's evidence that it's definitely not just about trade. It's about using trade to achieve other goals.]

Countries around the world have already negotiated with Trump to resolve the "tariff bomb" by using all means of communication.

I'm YTN's Kwon Younghee.

Edit
video: Han Kyung-hee