US Economy Faces Slowdown as Tariffs Take Hold

Intermediate | June 1, 2025

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Tariffs Cause Concern for US Economic Future

What Are Tariffs and Why Do They Matter?

Hey everyone! Let’s talk about what’s happening with the US economy right now. There’s a big worry that it might slow down, and guess what’s getting a lot of the blame? Tariffs! These are like extra taxes on goods that countries import. President Trump has put new tariffs on many imported products, and experts are starting to see these taxes affect the economy.

Lowered Growth Expectations

For example, J.P. Morgan Research recently lowered their prediction for how much the US economy will grow this year. They think the economy, measured by something called GDP, will grow less than they thought before. This is partly because businesses aren’t sure what will happen with trade rules, and the tariffs already in place are causing problems.

Prices Could Rise and Growth May Slow

How Tariffs Affect Everyday Costs

So, what does this mean for everyday people? Well, those tariffs can make things you buy from other countries more expensive. Think about clothes or maybe even cars. Some big stores and car companies are already saying they might need to raise prices because of the extra costs from tariffs.

Bigger Economic Worries

Economists are looking closely at important numbers like inflation (how fast prices are rising) and unemployment (how many people don’t have jobs). Some think inflation might go up first, and then unemployment could increase as the economy slows down. The International Monetary Fund (IMF) has even said there’s a higher chance of a recession in the US. A recession is when the economy shrinks for a period of time.

Uncertainty Slows Business Investment

It’s a bit of a complicated situation. While tariffs might be helping to reduce the amount of goods the US imports compared to what it exports, which President Trump wants, they are also causing uncertainty. Businesses find it hard to plan for the future when trade rules keep changing. This uncertainty can make businesses less likely to invest money or hire new people, which also slows down the economy.

Vocabulary

Tariff (noun): A tax on goods coming into or going out of a country.
*Example: “The government put a new tariff on imported cars, which made them more expensive.”
Economy (noun): The system of how a country makes, spends, and shares money.
*Example: “The country’s economy is growing, creating more jobs.”
Slowdown (noun): A reduction in speed or activity.
*Example: “We are seeing a slowdown in the housing market.”
Bite (verb): To have a negative or harmful effect.
*Example: “The new rules are starting to bite for small businesses.”
GDP (Gross Domestic Product) (noun): The total value of goods and services produced in a country in a specific time period.
*Example: “GDP is a key indicator of the health of an economy.”
Uncertainty (noun): The state of not knowing what will happen.
*Example: “Economic uncertainty makes it difficult for companies to make long-term plans.”
Inflation (noun): A general increase in prices and a decrease in the purchasing value of money.
*Example: “Inflation means your money buys less than it used to.”
Unemployment (noun): The state of being without a job.
*Example: “The unemployment rate is a measure of how many people are looking for work but can’t find a job.”
Recession (noun): A period when the economy is shrinking, usually for at least six months.
*Example: “Many people worry that the current economic slowdown could lead to a recession.”
Import (verb): To bring goods or services into a country from another country.
*Example: “The store decided to import fewer products from overseas due to the new tariffs.”

Discussion Questions (About the Article)

According to the article, what is one of the main reasons for fears of an economic slowdown?
How are tariffs expected to affect the prices of goods for consumers?
What does the article say about the possibility of a recession in the US?
How does uncertainty about trade rules impact businesses, according to the text?
What is GDP and why is it mentioned in the article?

Discussion Questions (About the Topic)

What do you think are the benefits and drawbacks of countries using tariffs?
Have you noticed any changes in prices for goods you buy that might be related to tariffs?
How do trade policies in one country affect other countries around the world?
What could governments do to help businesses deal with the effects of tariffs?
How important do you think international trade is for the global economy?

Related Idiom

Double-edged sword
Meaning: Something that has both good and bad consequences.
Example: “The new tariff policy is proving to be a ‘double-edged sword’ for the US economy.”

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This article was inspired by: BBC News, May 27, 2025