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The levies are also likely to reduce America’s economic output, as has happened before. A 2020 study, based on data from 151 countries, including the US, between 1963-2014, found that tariffs have “persistent adverse effects on the size of the pie,” or the gross domestic product of the country imposing them.
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There are a number of possible explanations for this.

One is that, when tariffs are low or non-existent, the country in question can focus on the kind of economic activities where it has an edge and export those goods and services, Gimber told CNN.
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“If you raise tariffs, you’re not going to see that same level of specialization,” he said, noting that the result would be lower labor productivity. “The labor could be better used elsewhere in the economy, in areas where you have a greater competitive advantage.”
Another reason output falls when tariffs are raised lies in the higher cost of imported inputs, wrote the authors of the 2020 study, most of them International Monetary Fund economists.

Fatas at INSEAD suggested the same reason, providing an example: “So I’m a worker and work in a factory. To produce what we produce we need to import microchips from Taiwan. Those things are more expensive. Together, me and the company, we create less value per hour worked.”

Yet another way tariff hikes can hurt the economy is by disrupting the status quo and fueling uncertainty over the future levels of import taxes. That lack of clarity is particularly acute this year, given the erratic nature of Trump’s trade policy.

Surveys by the National Federation of Independent Business in the US suggest the uncertainty is already weighing on American companies’ willingness to invest. The share of small businesses planning a capital outlay within the next six months hit its lowest level in April since at least April 2020, when Covid was sweeping the globe.

“The economy will continue to stumble along until the major sources of uncertainty (including over tariffs) are resolved. It’s hard to steer a ship in the fog,” the federation said.

Whichever forces may be at work, the IMF, to cite just one example, thinks higher US tariffs will lower the country’s productivity and output.

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Rome — There’s a reason archaeologist Ersilia D’Ambrosio can scarcely contain her excitement as she leads the way through dimly lit passageways deep below the Capitoline Hill that was once at the heart of ancient Rome: In a city where almost every historic treasure has been laid bare, this vast subterranean labyrinth is an undiscovered world.
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“No one has seen these caves and tunnels for more than a century,” D’Ambrosio tells CNN, plunging further into the gloom. These chambers, which cover around 42,000 square feet, or 3,900 square meters — roughly three-quarters the area of an American football field — lie in an area beneath the Ancient Roman Forum and the 2,000-year-old Marcello Theater. At its deepest point, one of the caves extends about 985 feet below the surface.
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Known as the Grottino del Campidoglio, or Capitoline Grotto, these tunnels have been part of the fabric of Rome even since before the days of Julius Caesar, despite being forgotten in recent generations. Comprehensively developed in the Middle Ages, they were in continuous use until the 1920s, at various times housing entire communities, shops, taverns, restaurants and, in World War II, people sheltering from falling Allied bombs.

Above ground, on the steamy morning in July when CNN was granted exclusive access to the cavern network, tourists sweated in temperatures of 95 degrees Fahrenheit (35 Celsius) as they explored the Capitoline Square, designed by Michelangelo in the 16th century, and the Capitoline Museums complex. Seventy-five feet below, in the grotto, it’s decidedly cooler at around 55F, with the damp air causing condensation to glitter on some of the tunnel surfaces.
Some of the passages are neatly constructed and lined with bricks, a sign of their development and use in the 19th century. Others are more roughly hewn from tuff, a soft volcanic rock from which the famous Seven Hills of Rome are formed. Walking through the tunnels is a trip back in time, with Rome’s complex layers of history laid bare.

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