Recent data issued in the United States indicate that inflation is accelerated in June, showing that the effects of the rates imposed by the Donald Trump government have already been warned in the American consumer’s pocket. In the meantime, the direction must face growing pressure to control prices and, in parallel, announces mass layoffs in federal agencies, a scenario that increases the seizure of the country’s economic future.
Recent data issued in the United States indicate that inflation is accelerated in June, showing that the effects of the rates imposed by the Donald Trump government have already been warned in the American consumer’s pocket. In the meantime, the direction must face growing pressure to control prices and, in parallel, announces mass layoffs in federal agencies, a scenario that increases the seizure of the country’s economic future.
Luciana Rosa, RFI correspondent in New York
The first concrete signs of the so called “commercial war” started by Trump already appear in the US economic data. According to the Department of Labor Statistics, the consumer price index (CPI) increased by 2.7% in June compared to the same month last year, the highest increase since February. This increase was above expected and represents an advance compared to the 2.4% recorded in May.
The most affected sectors are precisely those exposed to the rates applied by the United States government against their main commercial partners. Products such as appliances, clothing and furniture have recorded significant increases: appliances, for example, increased by 1.9% in June only, compared to 0.8% of the previous month. The furniture increased by 1%and the clothing increased by 0.4%, reversing the consecutive months of drop in prices.
The “core” inflation – which excludes food and energy for its volatility – has increased by 2.9% compared to the previous year, growing by 0.2% only in June. These data indicate that the tariff war is already pressing directly at the cost of life of the Americans, with impacts that can spread in other sectors and influence the rhythm of the economy.
The impact of rates on Brazilian products
One of the most recent chapters of this commercial war involves Brazil. The Trump government has threatened to impose a 50% rate on all Brazilian products next month, including the items that are pillars of the Brazilian exporter, such as coffee, beef and orange juice.
In the case of coffee, the impact could be even more serious. In addition to the rate, the product must already face a global discharge due to unfavorable weather conditions, such as the recent droughts that have reduced production to Brazil and Vietnam, two of the largest exporters in the United States. According to Bureau of Labor Statistics data, the average price of 450 grams of coffee on the ground in American supermarkets went from $ 5.99 last year to $ 7.93 in May of this year.
With the rate of 50%, the price of coffee should be even more expensive for the American consumer, which should also affect the consumption in cafés and restaurants. For Brazil, this measure can mean a drop in exports and damage to agri -food agro, at a time when the sector must already face climatic and economic challenges.
Economists warn that if Trump maintains the new rates scheduled to enter into force on 1 August – which will also reach the European Union, Canada, Mexico, Japan, South Korea and Thailand – the increase in prices could be further, reducing consumption and increasing the risk of recession in the United States.
Mass layoffs: guide the concerns of the state machine
In addition to the effects of inflation, Americans will face the consequences of the downsizing of the Federal Departments for Health and Education. This week, the United States Health Department has formalized the resignation of thousands of employees after the Supreme Court suspended an injunction that prevented these cuts.
The agency had previously announced the dismissal of 10,000 servers, with another 10,000 who voluntarily left. With the decision of the Court, the layoffs were taken, which represent about 25% of the sector workforce. In the Department of Education, the Supreme Court also authorized the dismissal of about 1,400 employees, overturning a decision of a lower court that blocked the cuts.
These layoffs are part of a wider government strategy to reduce the size of the public machine, in line with the decentralization agenda of federal control, in particular on education.
Although the main purpose of these layoffs is to reduce federal expenditure, they can negatively affect the government’s ability to provide essential services in fundamental areas, precisely at a time when the country must face the high cost of life and economic uncertainties.
In addition, reducing public officials can reduce the available income of these families, reducing consumption and contributing to the slowdown of the American economy.
Source: Terra
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