Lovely Talks to China Daily About Tariffs and Consumer Spending

July 3, 2025

China Daily

Mary E. Lovely

Economics Department

China

International Affairs

Tariffs

Trade

United States

China Daily

Mary E. Lovely

In May, U.S. consumer spending declined for the first time since January, largely due to concerns about tariffs raising prices, with notable drops in purchases of goods like vehicles and services such as dining out.

Despite a modest rise in spending on housing and health care, economists warn that tariffs are having a regressive impact and could keep inflation elevated, complicating Federal Reserve policy decisions.

“The…taxes are economically significant…and regressive in the sense that they take a larger share of income from poorer households than richer households,” says Mary Lovely, professor emerita of economics.

Read more in the China Daily article, “Consumers continue to rein in spending over fears about tariffs.”