A new deal was announced Wednesday with South Korea, a major trading partner. CBS News business analyst Jill Schlesinger breaks down what it means for consumers.

Washington

Donald Trump has signed an order to impose tariffs imports into the U.S. from countries including China, Mexico and Canada.

Global Tariffs

The United States has announced a new trade deal with South Korea, imposing a 15% tariff on goods imported from the country. This move follows similar agreements with other major trading partners and marks the highest tariff rate since the 1930s if broadly applied.

Economists and analysts suggest that American consumers may experience higher prices on items such as cars, electronics, and furniture as these tariffs take effect. The Federal Reserve has opted not to raise interest rates, citing concerns that increased tariffs could drive inflation higher. While this is challenging for borrowers facing high loan rates, savers may benefit from continued high interest on savings accounts.

What Trump's trade deal with South Korea means for consumers

Now, to some big economic news that could affect every American. Tomorrow is President Trump's deadline for major new tariffs on nearly every country in the world. A new deal has been announced with one major trading partner. That is South Korea, which adds a 15% tariff on goods from that country. So, what does this all mean for prices? Let's ask our CBS News business analyst, Jill Schlesinger. Jill, good to see you. Good morning. Good morning. So, South Korea is a top 10 trading ally for the United States. What are some of the main takeaways from this big deal? They were looking to strike a deal after the president struck one with Japan. Absolutely. I mean, I think, like, you know, when you say orange is the new black, 15% is now the new black. We started this year with so many economists believing that there were going to be sort of generalized 10% tariff rates applied. When the president came out on April 2nd and announced these much higher levels, that's when markets really freaked out and people freaked out. Now it seems that we're settling at a 15% tariff rate with some, I would say, hazy details on how those countries will be investing in the United States, different for each country. But you know, when you think about a 15% rate, it sounds better than 25 or 50, but remember, if this really holds across all of these trading partners, this would be the highest tariff rate since the 1930s. So it is still significant. It hasn't really worked its way into the economy just yet. So what does this mean for consumers? I think that what you will find is if you're out shopping right now for certain items, you are going to see a little sticker shock. You know, maybe it's a car, whether it's imported or domestic. Maybe it's a gadget or an electronic or a computer or furniture. Maybe even things that are like toys, which could get more expensive. But economists say we should not fall into a sense of security if you're not buying those goods because it often takes six to 12 months for the impact of tariffs to kind of wind their way through the economy. I think what we are seeing is people are nervous that prices will be rising. They understand tariffs are paid by the importing country, not by anyone else, and that that's likely to make prices go up. Really quickly, your analysis tracks with what the Fed chair, Jerome Powell, has said about why he doesn't want to raise interest rates at this point. Yeah. You know, yesterday, Powell spoke after the Federal Reserve decided to take no action. And critically, two people dissented on that. That hasn't happened in 30 years or so. I think what the Fed is really trying to do, and he underscored this yesterday, is balance its two jobs. We want the economy strong enough to have a vibrant labor market. He described the labor market as solid. But they're very concerned that these tariffs will push up the inflation rate. So for now, he said, hey, you know what, I'm going to hang out. This is terrible news if you're a borrower. Honestly, credit card interest rates are over 20 percent. We see auto loans at 7, 8 percent. Mortgage rates, which the Fed does not actually control, still up towards 7 percent. Bad news for borrowers. Good news for savers. If you're a saver, you're still getting high interest rate on those high yield savings accounts as well as those money markets and the CDs. Brilliant analysis as always. Joel Schlesinger, thank you very much.

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What Trump's trade deal with South Korea means for consumers

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