How Tariff Policies Could Impact Markets and Crypto Assets

Source: CryptoNewsNet Original Title: Trump’s Plan Could Crush Dollar Strength & Boost BTC Original Link: https://cryptonews.net/news/analytics/32304342/ The tariff debate resurfaced strongly on Inauguration Day 2026. Recent economic studies have highlighted significant impacts on the American economy, questioning long-standing protectionist claims and arguing that tariffs hurt Americans more than foreign nations.

What the Studies Are Showing

Recent research paints a clear picture. Tariffs raise costs across the economy, with most of the burden falling on domestic consumers. Companies often pass higher import costs to buyers, leading to higher prices on everyday goods. The effect spreads quickly through supply chains, increasing inflation pressure as a result.

Goldman Sachs released updated findings in late 2025, showing that U.S. consumers absorb about 55% of tariff costs. Businesses take on some burden as well, while foreign exporters pay the least share. This challenges claims that tariffs punish overseas producers and suggests the opposite outcome.

Harvard Research Confirms Inflation Impact

Harvard economists reached similar conclusions, linking tariffs to a 0.7% rise in consumer prices. Low- and middle-income households feel the impact the most, as these groups spend a higher share on goods. Tariffs effectively act like hidden taxes, with effects that are broad and hard to avoid.

Foreign exporters often adjust pricing strategies or shift supply chains. Some reduce margins slightly to stay competitive, but many costs still move downstream. U.S. importers and retailers fill the gap, and consumers then pay more at checkout. This limits the pressure on foreign economies.

Political Messaging vs Economic Reality

Tariffs are often framed as tools of strength and marketed as protection for local jobs. However, economic data tells a different story. The benefits are narrow and short-lived, while costs are wide and persistent. This gap fuels ongoing debate among economists and policymakers.

Households face higher prices on food, electronics, and clothing. Small businesses struggle with rising input costs, with profit margins tightening quickly. Some firms cut hiring or raise prices further, and wage growth rarely keeps pace, reducing real purchasing power over time.

Market Reactions and Investor Concerns

Markets closely watch trade policy signals, as tariff uncertainty increases volatility. Investors price in slower growth and higher inflation, with risk assets often reacting negatively. Long-term planning becomes harder for companies as confidence weakens when costs remain unpredictable.

The studies add pressure to revisit tariff policies. Lawmakers face growing evidence against broad tariffs, and targeted measures may replace blanket approaches. Economic data will play a bigger role in policy decisions. While the debate is far from over, the evidence is becoming harder to ignore.