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This surprises nobody. People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP. Greater economic uncerta

This surprises nobody. People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP. Greater economic uncertainty and higher savings rates. Difficult labor market. The only question is the depth and the duration of the dip.

onlyrealcuzzo 2y ago
It's interesting that the Great Depression was triggered by tariffs.
- silveira 2y ago
  https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac... That's what put "Great" in Great Depression. Let's see if this one will be "great again".
- zippy5 2y ago
  My understanding is that it was more the 9000 bank failures effectively created a credit crunch. Like if a bank closes and there's no replacement, then most small business were unable to get loans. Farmers who couldn't afford to plant new crops, factories can't improve equipment, inventory get's squeezed across the supply chain, ect. Exports were about 5% of GDP, suggesting that maybe tarrifs may have been the trigger but weren't the primary cause of the depression. https://www.sjsu.edu/faculty/watkins/depression.htm https://www.sjsu.edu/faculty/watkins/depression.htm
  - agent281 2y ago
    Then after that, they passed Hawley Smoot Tariff Act to make up for the budget short fall. That caused an already bad situation to get much, much worse.
  - onlyrealcuzzo 2y ago
    Banking crises are largely accounting problems and can - mostly - be fixed from accounting. There will be winners and losers, and many people won't like the result, but it's not going to end in a Great Depression. Tariffs - on the other hand - can break your actual, real, non-financial economy - which cannot be fixed by accounting.
  - borgdefenser 2y ago
    The problem was tightening the money supply, this is common knowledge. It is why the central bankers always flood the system with liquidity when things go south now. I would honestly pay a monthly fee for a board like this that is completely devoid of political nonsense. It is just so boring to read in every subject.
- 827a 2y ago
  Though, to be fair, the level of tariffs we're talking about in the 30s was like 60-70%; that's a very far cry from where we're at today.
  - Aloisius 2y ago
    Didn't Trump campaign on a 60-100% tariff on importers buying from China? Given importers have been paying tariffs averaging close to 20% since Trump raised them back during his first term, that would imply that they'll be close to 40% in a week when they get raised again.
JumpCrisscross 2y ago
> People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP It does, in inventories. But 34 have 77% reporting on inventories and 85% on imports [1]. To the extent this model is saying something, it’s to watch inventories build and deplete. [1] https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/february/ https://www.ismworld.org/supply-management-news-and-reports/...

onlyrealcuzzo 2y ago

It's interesting that the Great Depression was triggered by tariffs.

silveira 2y ago
https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Act https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac... That's what put "Great" in Great Depression. Let's see if this one will be "great again".
zippy5 2y ago
My understanding is that it was more the 9000 bank failures effectively created a credit crunch. Like if a bank closes and there's no replacement, then most small business were unable to get loans. Farmers who couldn't afford to plant new crops, factories can't improve equipment, inventory get's squeezed across the supply chain, ect. Exports were about 5% of GDP, suggesting that maybe tarrifs may have been the trigger but weren't the primary cause of the depression. https://www.sjsu.edu/faculty/watkins/depression.htm https://www.sjsu.edu/faculty/watkins/depression.htm
- agent281 2y ago
  Then after that, they passed Hawley Smoot Tariff Act to make up for the budget short fall. That caused an already bad situation to get much, much worse.
- onlyrealcuzzo 2y ago
  Banking crises are largely accounting problems and can - mostly - be fixed from accounting. There will be winners and losers, and many people won't like the result, but it's not going to end in a Great Depression. Tariffs - on the other hand - can break your actual, real, non-financial economy - which cannot be fixed by accounting.
- borgdefenser 2y ago
  The problem was tightening the money supply, this is common knowledge. It is why the central bankers always flood the system with liquidity when things go south now. I would honestly pay a monthly fee for a board like this that is completely devoid of political nonsense. It is just so boring to read in every subject.
827a 2y ago
Though, to be fair, the level of tariffs we're talking about in the 30s was like 60-70%; that's a very far cry from where we're at today.
- Aloisius 2y ago
  Didn't Trump campaign on a 60-100% tariff on importers buying from China? Given importers have been paying tariffs averaging close to 20% since Trump raised them back during his first term, that would imply that they'll be close to 40% in a week when they get raised again.

JumpCrisscross 2y ago

> People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP It does, in inventories. But 34 have 77% reporting on inventories and 85% on imports [1]. To the extent this model is saying something, it’s to watch inventories build and deplete. [1] https://www.ismworld.org/supply-management-news-and-reports/reports/ism-report-on-business/pmi/february/ https://www.ismworld.org/supply-management-news-and-reports/...