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T ariffs set by President Donald Trump in recent weeks have stirred concerns among economists that prices for businesses and consumers will rise in coming weeks, reigniting inflation, increasing the jobless rate and slowing economic growth.

Imposing 25% tariffs on products from Canada and Mexico and raising duties on Chinese goods an additional 10% could push up the personal consumption expenditures price index, excluding volatile food and energy prices, by 0.5 percentage point to 0.8 percentage point, according to research by the Boston Fed. The so-called core PCE is the central bank’s preferred inflation measure.

“There are no winners in a trade war,” S&P Global Ratings Chief Global Economist Paul Gruenwald said Thursday in a statement. “The U.S.-instigated tariffs and trading partner counter-tariffs will lead to across-the-board lower GDP growth, higher unemployment rates and higher inflation,” he said.

The Trump administration said Thursday it will pause until April 2 tariffs of 25% on goods subject to the USMC, an agreement between Canada, Mexico and the U.S. negotiated during President Donald Trump’s first term. It did not announce a change to 20% tariffs on Chinese imports.

Bessent, answering questions after a speech to the Economic Club of New York, flagged gains in federal revenue from import duties.

“Right now we have substantial tariff income from China that President Biden left on,” he said, adding that revenue from new import duties “could be very substantial.”

Bessent rejected the view that tariffs would disproportionately harm lower-income households.

The Trump administration could use tariff revenue to offset an elimination of taxes on tips, Social Security, overtime pay and other benefits as promised by Trump during his campaign for a second term, Bessent said.

Such tax cuts would “all accrue to the bottom 50% of wage earners and working Americans,” Bessent said, adding “I think that would be pretty great.”

While using tariffs to achieve “reciprocity” with trade partners, the Trump administration also aims to bring down the yield on the 10-year Treasury note, the benchmark for a range of borrowing, Bessent said.

“You will notice that he has stopped calling for the Fed to cut rates,” Bessent said, referring to Trump. “We want to focus on the 10-year, and what can we do as an administration to bring that down.”