Tariffs Are Hours Away From Going Into Effect: How Long Will They Last?

President Donald Trump’s wide-ranging “reciprocal” tariffs against U.S. trading partners are scheduled to go into effect at midnight. How long they last could determine the fate of the U.S. economy.

The tariffs of at least 10% against almost every country in the world have already been put in place, with additional tariffs against certain countries set to take effect at 12:01 a.m. early Wednesday morning, according to the White House. On Tuesday, Trump said on social media that he was negotiating lower tariffs with South Korea and other countries, and his top economic advisor, Treasury Secretary Scott Bessent, said 70 countries had called to make deals.

Talk of deals fueled speculation that his wide-ranging and aggressive tariffs would, in the end, amount to a negotiating tactic rather than an overturning of the post-WWII era of free trade. Trade deal hopes powered a stock market rally that at least temporarily reversed some of the losses over recent days.

The Next Few Days Could Be Vital For Tariffs

Several forecasters said that the trajectory of the economy hinges on how quickly deals are reached and how long the tariffs stay in place. Economists at Goldman Sachs said the economy had a 45% chance of falling into a recession in the coming year, assuming Trump scaled back the tariffs significantly from what he announced last week. However, a recession is likely if the tariffs go into effect as Trump had initially outlined them, even if deals are negotiated later on, Jan Hatzius, chief economist at Goldman, wrote in a commentary.

“A U.S. Administration that doubles down will have immense global implications for 2025 and the years and decades ahead,” Jim Reid, head of thematic and macro research at Deutsche Bank, wrote in a commentary. “At the moment, there are few signs they are backing down, which will likely signal more market turmoil ahead. Rarely, if ever, have the next few days been so important.”

Could Stagflation Be Ahead?

The tariffs, should they stand, would likely drive up prices for U.S. consumers, given that many products are imported or built with parts or materials brought in from overseas. That would have far-reaching fallout for the economy.

Just one example: UBS estimated that the iPhone 16, manufactured in China, could see its price increase by $350 from $1,119. That calculation was made a day before Trump threatened to hit China with an additional 50% tariff on top of the 54% tariff he had already announced, bringing the tariff rate to one of America’s largest trading partners to 104%.

At the same time, tariffs would slow business, reducing economic growth and risking a recession and a surge in unemployment. Deutsche Bank forecasts that the unemployment rate could jump as high as 5% by the end of the year, up from the range of 4% to 4.2%, where it’s hovered for months.

Slower growth and higher inflation could create “stagflation,” a financially painful condition for household budgets.

It Wouldn’t Be the First Time Trade Policies Have Shifted Last Minute

In previous rounds of Trump’s trade wars, the president has announced tariffs only to alter them at the last minute or negotiate deals shortly after the fact.

The rapidly shifting policy and the possibility that the tariffs will stick have left consumers and business leaders uncertain about the future, tanking consumer confidence. That uncertainty deepens the risks to the economy, Hatzius wrote.

Short of Trump backing down or negotiating deals, the tariffs could be rescinded without Trump’s say-so. Several lawsuits have challenged Trump’s authority to impose the tariffs under emergency presidential powers.

Lawmakers could also curtail Trump’s tariff power. A bipartisan bill introduced last week would require the president to seek approval from Congress for any tariffs. The bill reportedly has the support of seven senators of the Republican majority but could face a veto from Trump.