How should monetary policy respond to tariffs?

Analyses

This analysis explores how tariffs propagate through prices, trade flows, and growth, and outlines why central banks should not only monitor price pressures, but also the broader impact on demand, confidence, and financial conditions.

Gepubliceerd: 05 maart 2026

Door: Gavin Goy Kostas Mavromatis

Tariffs are reshaping global economic trade, with consequences that extend well beyond the countries implementing them. Recent tariff increases by the United States are pushing up costs, disrupting supply chains, and dampening economic activity on both sides of the border. These effects raise an important question for central banks: what are the macroeconomic implications of tariffs and how should monetary policy respond?