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The article is careful to avoid strong cause/effect statements though it strongly implies that tariffs will cause inflation. Leaving aside the wisdom of tariffs
by jasonthorsness 1y ago
The article is careful to avoid strong cause/effect statements though it strongly implies that tariffs will cause inflation. Leaving aside the wisdom of tariffs in general, I am not sure that is the inevitable outcome.
- AnimalMuppet 1y agoWell, it will cause either 1) much greater efficiency, 2) lower profits, or 3) higher prices. American capitalism being what it is, 3 is the most likely outcome. And higher prices are exactly what the inflation statistics measure. The difference is that, if tariffs go to 50%, say, and stay there, then prices rise corresponding to 50% of the foreign content, but they don't keep rising (unless either the tariff rate rises or the foreign content rises). So it would be more of a one-off bump in inflation rather than continual inflation, which is what most people mean.