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Tariffs are creating confusion in the marketplace, and retailers and advertisers alike are anxiously waiting to see how they impact the economy. And they have created confusion in the marketplace with how they will be impacting the economy. A University of Pennsylvania Wharton study noted the increase in economic uncertainty driven by tariffs: “Economic policy uncertainty can be quantified using the Economic Policy Uncertainty (EPU) Index, a measure designed to capture uncertainty surrounding economic policy decisions. By the end of March, the EPU reached its highest point since the beginning of the COVID-19 pandemic, doubling in value from the start of January.”
According to the Wharton study — which analyzed three scenarios: consumers taking on 100%, 75% and 50% of the tax burden from the tariffs — almost every U.S. household will see a negative impact on gross income, regardless of who bears the burden of the tariffs. (The only exception would be households with an average age of 50-59 at the time of the tariff policy change in the top 20% income bracket.) Overall, the study shows how the negative economic impacts of the tariffs and the resulting uncertainty will cause consumers to pull back on spending.
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