{"682575":{"#nid":"682575","#data":{"type":"news","title":"The Hidden Costs of Trade Wars: Expert Analysis on Economic Shifts","body":[{"value":"\u003Cp\u003EFrom grocery bills to gas prices and the cost of new cars, Americans are feeling the ripple effects of an increasingly uncertain global economy. According to Georgia Tech experts, while headlines often focus on trade wars or interest rates, the underlying forces at play \u2014 and their long-term consequences \u2014 are more complex.\u003C\/p\u003E\u003Ch4\u003E\u003Cstrong\u003ERecession Risks and the Current Economic Climate\u003C\/strong\u003E\u003C\/h4\u003E\u003Cp\u003E\u003Ca href=\u0022https:\/\/www.scheller.gatech.edu\/directory\/faculty\/hsu\/index.html\u0022\u003EAlex Hsu\u003C\/a\u003E, a finance professor in the Scheller College of Business, suggests we may already be in a mild recession, even if it\u2019s not yet officially declared.\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cRecession declarations are always made after the fact,\u201d he explains. \u201cA real-time clue? Look at crude oil prices \u2014 they\u2019re down 15% this year, often signaling slowing economic activity.\u201d That\u2019s similar to the trend seen in the early months of the 2008 recession, when oil prices dropped sharply as demand weakened. Despite this, the labor market remains strong in certain sectors, creating a mixed economic picture that\u2019s tough to navigate.\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cIf you\u2019re trying to get a sense of where the economy is going,\u201d Hsu adds, \u201cwatch weekly jobless claims and energy prices \u2014 those are among the most timely indicators available.\u201d\u003C\/p\u003E\u003Ch4\u003E\u003Cstrong\u003EHow Tariffs Are (and Aren\u2019t) Affecting Prices\u003C\/strong\u003E\u003C\/h4\u003E\u003Cp\u003E\u003Ca href=\u0022https:\/\/www.gatech.edu\/expert\/tibor-besedes\u0022\u003ETibor Besede\u0161\u003C\/a\u003E, a professor in the School of Economics, likens tariffs to sales taxes \u2014 costs added at the border that can eventually be passed to consumers.\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cIf a $20,000 imported car is hit with a 25% tariff, someone\u2019s paying that $5,000,\u201d he says. Besede\u0161 warns that most tariffs imposed since early 2025 affect nearly all imported goods \u2014 cars, electronics, toys, and clothing. He cites past studies showing tariffs on Chinese goods were largely paid by U.S. consumers, and this time may be no different. \u201cChina has told its firms not to lower prices. So, we should expect prices here to rise.\u201d\u003C\/p\u003E\u003Cp\u003EHowever, the recent agreement that began on May 14 between the U.S. and China on a new trade deal has offered a moment of relief. As part of the agreement, both countries will temporarily ease tariffs announced in April for 90 days, with China suspending its planned 34% tariff on U.S. goods, while maintaining a 10% tariff during the pause. Similarly, the United States will suspend its 34% reciprocal tariff while keeping a 10% tariff in place.\u003C\/p\u003E\u003Cp\u003E\u201cIt\u2019s a welcome sign that hopefully trade tensions are subsiding and that after 90 days there will be a more permanent deal whereby the tariffs at least do not increase from these reduced levels,\u201d Besede\u0161 says. \u201cIt\u2019s difficult to say anything more concrete but, overall, I take this as a positive sign that we may be stepping back from the brink of an all-out trade war and empty shelves in stores.\u201d\u003C\/p\u003E\u003Cp\u003EYet even with signs of progress, uncertainty lingers. Hsu, while cautiously optimistic, adds that \u201cThe 90-day pause only prolongs the trade instability. Although it is a good sign that the administration seems willing to negotiate, businesses are still in a holding pattern until a more definitive resolution is reached.\u201d\u003C\/p\u003E\u003Ch4\u003E\u003Cstrong\u003EThe Bigger Picture: Global Alliances and Economic Protectionism\u003C\/strong\u003E\u003C\/h4\u003E\u003Cp\u003EAs countries reorient their trade relations in response to shifting U.S. policies, Besede\u0161 warns that the long-term consequences could leave the U.S. isolated on the global stage.\u0026nbsp;\u003C\/p\u003E\u003Cp\u003E\u201cCountries are starting to look for alternative trading partners,\u0022 he says. \u201cIf the U.S. is not careful, it could lose its influence in global trade, leading to slower economic growth.\u201d He suggests that the growing shift toward regional trade blocs and alternative alliances \u2014 such as the EU-China partnership \u2014 could erode U.S. competitiveness.\u0026nbsp;\u003C\/p\u003E\u003Cp\u003EHsu concurs, noting that global economic shifts, coupled with increasing tariffs, could exacerbate the risks of a financial crisis. \u201cPay attention to the credit market,\u201d he advises. \u201cWhen liquidity dries up, it can cause the financial system to freeze, leading to contagion.\u201d He notes that the Federal Reserve is closely monitoring these risks and still has a range of policy tools at its disposal to help stabilize the system in the event of a crisis.\u003C\/p\u003E\u003Ch4\u003E\u003Cstrong\u003EThe Road Ahead\u003C\/strong\u003E\u003C\/h4\u003E\u003Cp\u003EAs Americans navigate rising prices and economic uncertainty, these experts suggest focusing on fundamentals \u2014 energy prices, jobless claims, and the broader flow of trade and investment. Whether tariffs prove to be a temporary disruption or a lasting shift in global commerce, the trade policies of today are shaping the economic realities of tomorrow. And while the recent U.S.-China agreement marks a hopeful step, the full extent of its impact on consumers, businesses, and global relationships remains to be seen.\u003C\/p\u003E","summary":"","format":"limited_html"}],"field_subtitle":"","field_summary":[{"value":"\u003Cp\u003EAs Americans face rising prices at the pump, grocery store, and car dealership, Georgia Tech experts say the signals behind today\u2019s economic uncertainty go deeper than headlines suggest. Finance professor Alex Hsu points to falling crude oil prices and weekly jobless claims as timely indicators that may show the U.S. is already in a mild recession \u2014 even if it hasn\u0027t been officially declared. Meanwhile, economist Tibor Besede\u0161 explains how recent tariffs function like hidden taxes, raising consumer costs and risking long-term damage to U.S. global trade influence. A temporary U.S.-China trade truce offers short-term relief, but both experts warn that lasting instability and shifting global alliances could reshape the economy for years to come.\u003C\/p\u003E","format":"limited_html"}],"field_summary_sentence":[{"value":"Georgia Tech experts unpack the hidden economic signals driving today\u2019s prices, trade tensions, and global uncertainty."}],"uid":"35798","created_gmt":"2025-05-28 19:57:37","changed_gmt":"2026-03-19 13:17:20","author":"Ayana Isles","boilerplate_text":"","field_publication":"","field_article_url":"","location":"Atlanta, GA","dateline":{"date":"2025-05-28T00:00:00-04:00","iso_date":"2025-05-28T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"677152":{"id":"677152","type":"image","title":"Trade Tensions","body":null,"created":"1748462265","gmt_created":"2025-05-28 19:57:45","changed":"1748462265","gmt_changed":"2025-05-28 19:57:45","alt":"America dollar and Yuan banknote with USA and China flags.","file":{"fid":"261021","name":"AdobeStock_1113957903.jpeg","image_path":"\/sites\/default\/files\/2025\/05\/28\/AdobeStock_1113957903.jpeg","image_full_path":"http:\/\/hg.gatech.edu\/\/sites\/default\/files\/2025\/05\/28\/AdobeStock_1113957903.jpeg","mime":"image\/jpeg","size":6187109,"path_740":"http:\/\/hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/2025\/05\/28\/AdobeStock_1113957903.jpeg?itok=3Qa830Ko"}}},"media_ids":["677152"],"related_links":[{"url":"https:\/\/news.gatech.edu\/news\/2025\/03\/11\/trade-agreements-keep-global-economies-stable","title":" Trade Agreements Keep Global Economies Stable"}],"groups":[{"id":"658168","name":"Experts"},{"id":"1214","name":"News Room"},{"id":"1188","name":"Research Horizons"}],"categories":[],"keywords":[{"id":"167003","name":"tariffs"},{"id":"180822","name":"Trade War"},{"id":"6605","name":"Trade"},{"id":"290","name":"Economy"},{"id":"187915","name":"go-researchnews"}],"core_research_areas":[],"news_room_topics":[{"id":"106361","name":"Business and Economic Development"}],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cdiv dir=\u0022ltr\u0022\u003E\u003Cdiv dir=\u0022ltr\u0022\u003E\u003Cp\u003E\u003Ca href=\u0022mailto:aisles3@gatech.edu\u0022\u003E\u003Cstrong\u003EAyana Isles\u003C\/strong\u003E\u003C\/a\u003E\u003Cbr\u003ESenior Media Relations\u0026nbsp;Representative\u0026nbsp;\u003Cbr\u003EInstitute Communications\u003C\/p\u003E\u003Cp\u003E\u003Ca href=\u0022mailto:media@gatech.edu\u0022\u003Emedia@gatech.edu\u003C\/a\u003E\u003C\/p\u003E\u003C\/div\u003E\u003C\/div\u003E","format":"limited_html"}],"email":[],"slides":[],"orientation":[],"userdata":""}}}