“I’d Tax Every Benz,” “It’s A Corpse That Still Moves”: Are You Getting The Truth On Trade?

“At the same time, tariffs would weigh on US growth. If we assume that Mexico and China retaliate with equivalent tariffs, this would substantially reduce demand for US exports, depressing US GDP by around 0.7pp by 2019. In fact, tariffs would likely hit US GDP so sharply that the Federal Reserve would be prompted to reduce interest rates to cushion the blow—despite an increase in inflation.”

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