"Trump 1.0" economic officials: The impact of tariffs will be evident across the U.S. by the end of next month, and the poorest will suffer the most

Former White House National Economic Council Director warns that the full impact of U.S. tariff policy will become apparent by the end of May, directly affecting the supply and prices of consumer goods. According to CCTV News, on April 27 local time, Gary Cohn, who served as the Director of the White House National Economic Council during Trump's first presidential term, stated that the impact of the current U.S. tariff policy will begin to be felt nationwide by the end of next month. This prediction is based on the time required for the transportation and distribution of goods. Cohn said that lower-income individuals will spend 100% of their wages on purchasing goods, while the wealthy will save a higher proportion of their income. This means that tariffs will have a greater impact on low-income Americans. Consumer Frenzy Cools, Pre-Purchases Can't Hide Subsequent Weakness Cohn observed that under the threat of tariffs, consumers have exhibited a clear behavior of "pre-loading" or "front-end purchasing." To avoid potentially higher prices in the future, people are rushing to buy cars, driving auto sales to record highs, while also purchasing large quantities of consumer goods, washing machines, and tech products. This has made the "hard data" of the economy appear "quite solid" in the short term—however, this is merely a superficial phenomenon. Cohn emphasized that the "soft data" reflecting future expectations, such as consumer confidence indices and various polls, are showing increasing signs of weakness. For instance, consumer confidence, which serves as a leading indicator of future spending, has already raised red flags. The first-quarter financial reports from major consumer goods companies also corroborated this: while the first quarter was acceptable, the outlook for the second quarter is generally pessimistic. From fast-food chain Chipotle, snack giant PepsiCo, to airlines and even high-end luxury brand LVMH, warnings of slowing sales have been issued. Consumers are retreating from the market, only purchasing necessities or items they believe will be "more expensive tomorrow." Tariff Shockwaves Will Fully Emerge by End of May, Low-Income Families Hit Hardest Cohn stated in an interview that, for example, it takes about eight weeks for a product to be shipped from China, cross the ocean, unload in the U.S., and be distributed to retail shelves—this means that the tariffs effective from April 2 will only truly be felt in the market in the last few weeks of May. Cohn repeatedly emphasized that tariffs are highly "regressive." He explained: "Lower-income individuals will spend 100% of their wages on purchasing goods... while the wealthy will save a higher proportion of their income." This means that when product prices rise due to tariffs, low-income Americans will feel the impact far more than the wealthy, as their purchasing power will be directly diminished. Even if tariffs only cause a one-time price shock rather than sustained inflation, without corresponding wage increases, "every American is losing purchasing power." Cohn pointed out that the impact of tariffs on low-income groups is immediate and disproportionate. The Federal Reserve's Predicament: No Hope for Rate Cuts, Inflation Concerns Regarding the market's hope for the Federal Reserve to cut interest rates to alleviate economic pressure, Cohen believes the possibility is slim. He stated, "The Federal Reserve is doing what it is authorized to do," currently, the United States is essentially at full employment, with an inflation rate of about 2.4%, very close to the target: "So, essentially, the Federal Reserve has no reason to take action (to lower interest rates) right now." In addition, tariffs themselves are expected to bring inflationary pressure, even if it is just a one-time price increase. Cohen believes that in this context of an "unpredictable economy" and "potential instability," coupled with the cost increases caused by tariffs, there is even less reason for the Federal Reserve to loosen monetary policy at this moment.