The mainstream expectation is that the new tariffs imposed by President Donald Trump will jack up prices and cause inflation to rise, but if the tariffs result in a recession and people lose confidence in the economy, inflation could fall.

That scenario is different from the one most commonly feared in the months ahead. Generally, it is thought that tariffs would raise prices because they are akin to a tax on consumers. When a tariff is assessed at the border, companies often pass it on to consumers in the form of higher prices. As Trump has moved to place tariffs on countries across the world, there is a widespread expectation that, in the short term, prices will rise across the board.