The Trump administration’s tariff policy has unfolded rapidly and continues to evolve. Although the highest tariff rates on most U.S. trading partners have been paused for 90 days to allow time for trade negotiations, a flat 10% tariff remains in effect on most goods, and additional tariffs are expected on electronics, semiconductors, and pharmaceuticals. When combined with previously announced tariffs on steel and aluminum, as well as the 145% tariff on most goods from China, the average effective tariff rate is the highest in over a century. The dollar has declined in response to the tariff announcements, which have increased the effective cost of imported goods further.
Much remains uncertain about where tariff rates will settle and just how disruptive they will be to the U.S. economy, but what we already know about the tariffs and other trade restrictions that have been announced allows for at least an initial outline of the potential risks they pose to the economy and the market for industrial real estate. The announced tariffs have been higher than most economists expected and are high enough to have a significant effect on supply chains, business decisions, and consumer behavior.