You need a PLUS account to view this content. Try one month of PLUS for FREE.
Already have an account? log in
What If Tariffs Are Deflationary This Time?
Here's an idea: What if new tariffs are deflationary?
If you're inclined to dismiss that out of hand, I won't blame you. I am too. Tariffs are a de facto consumption tax which could conceivably result in lower spending, but generally speaking -- ceteris paribus -- they just result in higher prices one way or another. It's worth noting that when the price of imported goods goes up, it allows domestic producers to raise prices. And as we've seen over the last several years, corporates will raise
After coming to terms with bidens performance last night ive been thinking about whether trump is going to get priced in over the first few weeks of Q2 and thinking about which sectors might catch a bid. US industrials come to mind, especially since theyve been weak. Energy obviously. Precious metals. IDK. Thoughts?
I think that extracting a 60% tariff on Chinese imports, $448BN in 2023, would be a $270BN tax on US consumers, disproportionately the lower-middle income. Seems recessionary.
In the short term, the supply chain will scramble to bring in goods before a possible tariff, good for transports and bad for manufacturers and retailers. Followed by the hangover of excess inventories and lower demand.