Prominent economists are raising concerns about the inflationary impact and economic consequences of former President Donald Trump‘s newly announced tariffs on major U.S. trading partners, with Allianz Chief Economic Advisor Mohamed El-Erian emphasizing the complexity of predicting their full effects.

What Happened: In a series of posts on X on Sunday, El-Erian addressed growing questions about the inflationary impact of Trump’s tariffs, which include a 25% duty on Mexican and most Canadian imports and a 10% tariff on Chinese goods.

“Unlike others who have proclaimed either ‘very’ or ‘not at all,’ I am quick to say we don’t know for sure,” El-Erian said.

El-Erian highlighted several key variables affecting the tariffs’ impact, including demand and supply elasticities, price pass-through speeds, and the lingering effects of 2021-2022 inflationary expectations.

“It's because there are several factors in play that translate not just into genuine analytical uncertainty but also consequential sector-and good-specific differences,” El-Erian added.

He also highlighted concerns about potential retaliatory measures, noting from a Bloomberg report that Trump’s executive orders include clauses that would increase U.S. tariffs if affected countries respond with counter-tariffs.

See Also: Bank Of Japan Signals Further Rate Hikes Possible Amid Inflation, Economic Overheating Worries

Why It Matters: Former Treasury Secretary Lawrence Summers offered a more direct critique, describing the tariffs as a “strategic gift to Xi Jinping” and a “bully strategy” that could have severe economic consequences. “Jobs in the industrial heartland will be lost as American producers can’t compete due to higher input costs,” Summers warned on X, adding that the measures could strain relationships with Canada and Mexico.

The tariffs, set to take effect Tuesday, target approximately one-third of U.S. imports, potentially affecting prices across various sectors from agriculture to automobiles.

The U.S. Chamber of Commerce has warned of supply chain disruptions and increased costs for American families, while economists note particular concerns about the $46 billion agricultural import relationship with Mexico and the $97 billion energy trade with Canada.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.