President Donald Trump’s expansive new tariffs flips on its head a decades-long global trend of lower trade barriers and is likely, economists say, to raise prices for Americans by thousands of dollars each year while sharply slowing the U.S. economy. The White House is gambling that other countries will also suffer enough pain that they will open up their economies to more American exports, leading to negotiations that would reduce the tariffs imposed Wednesday. Or, the White House hopes, more companies — both American and foreign — will reverse their moves toward global supply chains and bring more production to the United States to avoid higher import taxes. A key question remains: How will Americans react? But a key question for the Trump administration will be how Americans react to the tariffs. If prices rise noticeably and jobs are lost, voters could turn against the duties and make it harder to keep them in place for the length of time needed to encourage companies to return to the U.S. The Yale Budget Lab estimates that all the Trump administration’s tariffs would cost the average household $3,800 in higher prices this year. The figure includes the impact of the 10% universal tariff announced Wednesday, plus much higher tariffs on about 60 countries, as well as previous import taxes on steel, aluminum and cars. Inflation could top 4% this year, from 2.8% currently, while the economy may barely grow, according to estimates by Nationwide Financial. Investors turned thumbs down on the new duties Thursday, with the broad S&P 500 index dropping 4.1% in afternoon trading. The Dow Jones plunged more than 1,400 points. The only sector not selling off was consumer staples, which consists of companies that sell basic food stocks. Still, Trump offered an upbeat reaction Thursday when asked about the stock market drop as he left the White House to fly to his Florida golf club. “I think it’s going very well,” he said. “We have an operation, like when a patient gets operated on and it’s a big thing. I said this would exactly be the way it is.” The average U.S. tariff could rise to nearly 25% when the tariffs are fully implemented April 9, economists estimate, higher than it has been in more than a century and higher than the 1930 Smoot-Hawley tariffs that are widely blamed for worsening the Great Recession. Economists note that the United States engages in much more trade now than it did then. “The president just announced the de facto separation of the U.S. economy from the global economy,” said Mary Lovely, senior fellow at the Peterson Institute for International Relations. “The stage is set for higher prices and slower growth over the long term.” Commerce Secretary Howard Lutnick, in an interview on CNBC Thursday, said the policies will help open markets overseas for U.S. exports. “I expect most countries to start to really examine their trade policy towards the United States of America, and stop picking on us,” he said. ”This is the reordering of fair trade.” Mixed feeling among Americans so far Bob Lehmann, 73, stopped by a Best Buy in Portland, Oregon, to buy a keyboard Wednesday. He opposed the tariffs. “They’re going to raise prices and cause people to pay more for daily living,” he said. Mathew Hall, a 64-year-old paint contractor, said he thought […]