President Donald Trump recently declared the U.S. is in a “transition period” as tariffs reshape the economy , downplaying concerns about short-term economic pain. According to Reuters, Trump insisted the nation would emerge “fantastically” despite early signs of strain, including slower job growth and a shrinking GDP. The White House’s 10% baseline tariff on most imports, paired with higher rates for targeted countries like China, is designed to reset trade dynamics and encourage domestic production .

Read More: Trump’s Tariffs: Here’s What Economists Think Will Happen After the 90-Day Pause

Find Out: Here's the Minimum Salary Required To Be Considered Upper Class in 2025

While markets initially wobbled, officials argue this phase is temporary, with negotiations underway to ease tensions.

Here’s what experts and recent data say about how long the transition could last and what it could mean for households.

What Is the ‘Transition Period’?

Trump’s “transition period” refers to the economic adjustment after imposing tariffs on $1.2 trillion worth of imports in April 2025. According to the White House, the 10% baseline tariff is meant to incentivize domestic production while renegotiating trade terms. The administration claims this phase will last 90 days for most countries, but China faces a steeper 125% rate indefinitely.

Economists note the term lacks a formal definition, creating confusion for businesses and investors. The Wharton School estimates tariffs could reduce long-run GDP by 6% if maintained for several years, suggesting transitions are rarely painless. Markets remain skeptical, with the S&P 500 dropping 3.6% in April amid ongoing uncertainty.

Discover Next: 4 Mistakes the Upper Middle Class Are Making With Their Money in the Trump Economy

Economic Impacts So Far

The economic effects of the tariff transition period are already showing up in the data. According to Commerce Department data, the U.S. economy contracted by 0.3% in the first quarter of 2025. J.P. Morgan analysts estimate the new tariffs could push Personal Consumption Expenditures prices up by 1% to 1.5% this year. Most of these inflationary effects are expected to peak in the middle quarters, as increased costs filter through to consumers and businesses scramble to adapt.

Some automakers have shifted supply chains to Mexico, and retailers like Walmart warn of higher prices for holiday goods. Even cultural trade is affected, with the BBC noting that China has reduced U.S. film imports in response to ongoing tensions. In May 2025, the U.S. and China agreed to temporarily slash tariffs from 145% to 30% for the U.S. and from 125% to 10% for China, according to The New York Times. But experts warn this 90-day “de-escalation light switch” is unlikely to bring lasting stability.

Melanie Hart, a China trade specialist, points out that China holds significant leverage and is unlikely to make quick concessions, leaving long-term stability in question.

Meanwhile, businesses have responded by shifting supply chains, pausing investments, and warning of higher prices for everyday goods. The Washington Post stated that Retailers like Dollar Tree have said tariffs on toys and pencils could force store closures. The Washington Post also reported a 15% spike in doll prices, putting more pressure on family budgets and small businesses.

How Long Will It Last?

The biggest question for Americans is how long the tariff transition period will last. The White House initially described a 90-day window for most countries to negotiate new trade terms, with the possibility of extending or removing tariffs based on progress. For China, tariffs remain much higher and are set to continue indefinitely unless a breakthrough is reached.

Recent developments suggest some relief could be temporary. In May 2025, the U.S. and China agreed to a 90-day reduction in tariffs, dropping U.S. rates from 145% to 30% and China’s from 125% to 10%, as reported by The New York Times. However, these rollbacks are only temporary and do not address deeper trade disagreements, making a quick end to the transition period unlikely.

The White House continues to insist that tariffs are a negotiating tool, not a permanent fixture. However, analysts at Chatham House have said that if talks stall, the risk of a prolonged transition or even a recession grows. Political pressures are also mounting, with Trump’s approval rating at 42% and voters growing impatient for results, according to Reuters/Ipsos.

For now, Americans should expect continued uncertainty , with some tariffs set to expire or change after 90 days, while others could last much longer. The end of the transition period will depend on the outcome of ongoing negotiations and the willingness of trading partners to make concessions. Until then, both businesses and consumers should prepare for higher prices and a bumpy road ahead.

More From GOBankingRates

Sources :

This article originally appeared on GOBankingRates.com : Trump Says US Is in a Tariff ‘Transition Period’ — How Long Will It Last?