Janet Yellen warns that broad tariffs could make inflation worse.

Treasury Secretary Janet Yellen is set to deliver a speech today at the Council on Foreign Relations in New York, where she will caution against the potential economic repercussions of former President Donald Trump’s proposed tariffs. Yellen will emphasize how such tariffs could lead to a resurgence in inflation and negatively impact the economy. The proposed tariffs include a 10% across-the-board levy on all imported products and tariffs of 60% or more on imports from China.

While Yellen did not explicitly mention Trump in her statements, she highlighted the risks associated with implementing “sweeping, untargeted tariffs.” Economists agree that these broad-based tariffs would likely be inflationary, as they would ultimately be paid by U.S. consumers in the form of higher prices on a wide range of goods.

In excerpts of her speech released by the Treasury Department, Yellen expressed concerns about isolating America with high tariffs on both allies and competitors. She argued that such measures would result in higher prices for American families and diminished competitiveness for businesses.

On the other hand, Trump has been actively promoting his tariff plan in the lead-up to the presidential election. At a recent event, he touted tariffs as a means of protecting existing companies and attracting new businesses to the U.S. However, economists warn that the plan could significantly raise costs for middle-class households, with estimates suggesting an increase of up to $1,700 per year.

Furthermore, businesses that rely on imported parts for manufacturing, such as automakers, would also face higher costs under Trump’s tariff proposals. This could lead to price hikes for consumers and potentially impact the overall competitiveness of U.S. industries.

In contrast, Yellen will emphasize the efforts of the Biden-Harris administration in stabilizing the economy post-pandemic and strengthening relations with other countries. She views international cooperation as essential for sustained economic growth in the U.S. and advocates for policies that support global economic stability.

Overall, Yellen’s speech will underscore the importance of maintaining a global outlook and fostering mutually beneficial relationships with trading partners to promote economic prosperity. As the debate over tariffs continues, the implications for businesses and consumers alike remain a key consideration in shaping future economic policies.