There was supposed to be this Biden era analysis that showed that the tariffs were not broadly inflationary, and Biden kept a lot of the tariffs in place. One point that tariff proponents took from this was that tariffs COULDN’T be inflationary and wouldn’t drive up consumer prices.
Meanwhile, what happened was that many Chinese companies shifted parts of their production to non tariff countries and sidestepped the tariff costs. (Hence, prices were kept low, no taroffs due to that major loophole.)
Then, to keep that from happening again, Trump put the China tariff on every nation at once. No more loophole. But amazingly, they maintained a near religious belief that prices could be the same.
If you think in terms of complex systems, the first round of tariffs had all these self organizing details that defused the impact.
Round two is playing out like the administration can’t even see around the corner in simple causality cause-and-effect chains. They will never work out how to control the global trade using one country’s import tax program. Its insanity.
There was supposed to be this Biden era analysis that showed that the tariffs were not broadly inflationary, and Biden kept a lot of the tariffs in place. One point that tariff proponents took from this was that tariffs COULDN’T be inflationary and wouldn’t drive up consumer prices.
Meanwhile, what happened was that many Chinese companies shifted parts of their production to non tariff countries and sidestepped the tariff costs. (Hence, prices were kept low, no taroffs due to that major loophole.)
Then, to keep that from happening again, Trump put the China tariff on every nation at once. No more loophole. But amazingly, they maintained a near religious belief that prices could be the same.
If you think in terms of complex systems, the first round of tariffs had all these self organizing details that defused the impact.
Round two is playing out like the administration can’t even see around the corner in simple causality cause-and-effect chains. They will never work out how to control the global trade using one country’s import tax program. Its insanity.