Ten things you should know about Trump’s tariffs but were afraid to ask
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Donald Trump has followed his threats And it took 25% tariffs for Mexican goods and non-energy products from Canada, 10% of the 10% tariff of Canadian energy and the further Chinese products.
“Tariffs are about enriching America again, and again America are making themselves,” the President said on Tuesday evening. “It will be a little disturbance, but we are fine with it. It will not be much. ” Such was his confidence that in the next month he promised further charges from Europe, South Korea, Brazil and India.
International macroeconomics is difficult and Obviously not caught by TrumpSo here are 10 things, and he needs to know about his tariffs.
First, they are great. Those on Canada, Mexico and China are raising the average US tariff from 2024 to 2024 to 12 percent if trade flows remain unchanged. Therefore, it is an upper assessment, but the result will be the barriers to the US trade does not appear since World War IIA number
Second, it is important to remember that the importer pays. Tariffs: It is a tax for goods crossing the border.
Third, although the importer pays, the question of which is the final value is more complicated. The US supply network felt a pain for the vast majority of expenditures following 2018, and we should expect such a thing today.
Fourth, despite the estimated tariffs so far To increase $ 142 billion for US TreasuryThis is less than tenths $ 1.865 billion is expected to deficit US government In 2025 and implies that there is no behavioral change. Tariffs do not solve US fiscal incontinence.
The fifth, which imports about 10 percent of GDP, increasing the tariff level by almost 10 percentage points, probably the consumer prices will increase by 1%. This rough calculation is similar to more sophisticated estimates such as them From the Boston feeding personnel This week.
The sixth, the rise in prices differs from inflation, although consumers will rise to my paddiest. Although there is little doubt that followed by the last few years there is a higher risk than the pre-election epidemic, the companies and households will try to avoid the prices of high prices and payments. It’s inflationary.
The seventh, the United States is a very closed economy where the total goods were traded as the share of GDP 19% in 2023, For example, in Canada compared to 53 percent. This is despite the Trump’s rhetoric that the imports kills America and explains why US threats listen higher abroad than at home.
The eighth, the harmful effects of the US economy’s supply capacity to rates on interest rates. In contrast, pressure from Trump’s actions, contradictions, reduces investment intentions and leads down pressure on the pace. Investors: become more concerned About the latter, but since the elections, the expectations of interest rates have already risen.
Ninth, tariffs are far away from which the trade deficit is below, as the United States persistently consumes more than it produces full employment. The road to guarantee a drop will be the basis for a deep decline, cutting the demand for import.
Tenth, tariffs are unlikely to be popular. Price rise and preventing import purchase by throwing a commercial system is rare in the winning public opinion. Brexit that did the same, now in Britain is wildly useless, and Trump understood that the public’s hatred is rising in his election campaign. Society is unlikely to watch it as a slight disturbance.
However, one group who will be quietly excited about Trump’s tariff mania is economists. To explain wacky politics is great for business and will create some wonderful data collection to challenge for years.
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