Trump Tariffs a ‘Slow Burn’ for Wall Street, Poised to Hit US Economy Hard

New Delhi — The reciprocal tariffs introduced by US President Donald Trump are acting as a “slow burn” for Wall Street — avoiding immediate crisis but gradually distorting markets, straining consumers, and provoking retaliation, according to a new report.

Zoya Najeeb, writing in One World Outlook, warned that the absence of immediate turmoil should not be mistaken for safety. “While Wall Street celebrates record-high stock indexes, the US economy is quietly swallowing a bitter pill: tariffs,” she noted. “Markets that panicked in April are now shrugging at the reality of a trade regime that could prove far costlier than investors are willing to admit.”

White House Press Secretary Karoline Leavitt recently hailed $29 billion in tariff revenue for July, with Commerce Secretary Howard Lutnick forecasting $50 billion a month soon. But as the report stresses, “tariffs are taxes by another name” — effectively a tax hike on Americans at a time when lower-income households are already under pressure.

Caterpillar Inc., the US construction and engineering equipment giant, expects the new tariffs to cost up to $1.5 billion this year, including $500 million in the current quarter. Yet its stock price barely moved, buoyed by investor optimism over unrelated growth in AI data centres and infrastructure spending — a reflection, the report says, of a “K-shaped economy” where Wall Street thrives while Main Street struggles with rising grocery bills and increased reliance on “buy now, pay later” credit.

Although the AI boom is sustaining stock indexes, the S&P 500 is flat when technology stocks are excluded. The report also points out that Warren Buffett has been selling for 11 consecutive quarters, building a $344 billion reserve — a signal that he is preparing for a downturn even if the wider market isn’t.

Meanwhile, former US House Speaker Paul Ryan has warned of “choppy waters ahead,” predicting that tariffs will also face legal challenges.

With inputs from IANS