ING: Tariffs are back – and they're giving main character energy

Investing.com -- Tariffs have “re-entered the chat,” and markets are feeling the strain, ING said in its latest THINK Ahead note, warning that President Trump’s renewed tariff threats are “giving main character energy” as recession fears return.

“The vibes are off. Everyone’s low-key panicking and it’s giving recession energy,” ING quipped, adding that markets are showing signs of strain with “regional bank nerves… back,” funding markets “strained,” and “gold still looks unstoppable.”

The investment bank said Trump’s threat to impose 100% tariffs on China could take “the U.S. average tariff rate up to 31%, surpassing the levels seen around ‘Liberation Day,’” which it described as “unsustainable.”

Yet ING found it “interesting that there was a reaction” this time, given that many of Trump’s earlier threats “have fallen on deaf ears.”

Lynn Song of ING noted that “China has proven incredibly resilient to U.S. tariffs,” citing “offsetting demand from elsewhere in the world” and “higher-value export industries.”

ING economists expect the inflation effects of the current tariff regime to be “lower, but more drawn-out.” James Knightley, the bank’s U.S. economist, said “price increases feel like a matter of time,” particularly in the car industry, where new vehicle prices “have remained essentially flat.”

If Trump’s tariffs are ruled illegal, ING said the administration could still reimpose limited levies under Section 122, though that would likely mean “a lower effective tariff rate.”

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