Does Anyone Have The Truth About Trump's Tariffs?

Imposing tariffs on imported goods at the present time very likely will result in at least some price increase being passed along to consumers. With prices already trending up, adding an upward price pressure would only magnify that existing trend.

With regards to import prices, then, we should anticipate that Donald Trump’s tariffs will result in increased import prices.

Will that translate into increased consumer prices? While that is possible, the existing deflationary environment in goods prices suggests that the upward price pressure of tariffs will be mitigated at least in part by the current deflationary environment. An upward price pressure from tariffs could mean simply that goods prices do not fall as far as they otherwise would.

How will Trump’s new rounds of tariffs turn out? There is no way to know for certain in advance, but the prevailing price trends mean Trump has a fair bit of leeway before even the worst tariff strategy seriously impacts inflation.

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Links And Sources

1. Radcliffe, B. “The Basics of Tariffs and Trade Barriers.” Investopedia, June 26, 2024, https://www.investopedia.com/articles/economics/08/tariff-trade-barrier-basics.asp.

2. USTR Press Office. President Trump Approves Relief for U.S. Washing Machine and Solar Cell Manufacturers. 22 Jan. 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/january/president-trump-approves-relief-us.

3. The Investopedia Team. “Dumping: Price Discrimination in Trade, Attitudes and Examples.” Investopedia, Aug. 22, 2024, https://www.investopedia.com/terms/d/dumping.asp.

4. Berstein , J. “What Are Tariffs and How Do They Affect You?” Investopedia, Oct. 18, 2024, https://www.investopedia.com/news/what-are-tariffs-and-how-do-they-affect-you/.

5. “Trump's proposed tariffs would raise prices for these products, experts say” https://archive.ph/0OjBH

6. “Trump's tariff plan could spark a trade war — and U.S. taxpayers would pay the price” https://archive.ph/0vAxl

7. “Trump’s Tariffs” https://archive.ph/mcla3

8. “What Is Trump Trying To Accomplish With Tariffs?” https://archive.ph/NfIsG

9. “SCOTT BESSENT: Let's talk tariffs. It's time to revitalize Alexander Hamilton's favorite tool” https://archive.ph/C5jhV

10. “Breitbart Business Digest: China Tariffs Will Not Push Up Walmart’s Prices” https://archive.ph/3gdrF

11. Consumer Price Index data for durable and non durable goods during Trump’s first term https://fred.stlouisfed.org/graph/?g=1BzCn

12. Personal Consumption Expenditures Index data for durable and nondurable goods during Trump’s first term https://fred.stlouisfed.org/graph/?g=1BzD9

13. Import Prices during Trump’s first term https://fred.stlouisfed.org/graph/?g=1BzF7

14. “Biden Slammed Trump Tariffs But Kept Some. Why Experts Worry About New Ones” https://archive.ph/9ChX7

15. Consumer Price Index data for durable and non durable goods during the (Biden-)Harris Administration https://fred.stlouisfed.org/graph/?g=1ByUR

16. Personal Consumption Expenditures Index data for durable and nondurable goods during the (Biden-)Harris Administration https://fred.stlouisfed.org/graph/?g=1ByUM

17. Import Prices during the (Biden-)Harris Administration https://fred.stlouisfed.org/graph/?g=1BzFe

18. Import Prices from 2001 onward. https://fred.stlouisfed.org/graph/?g=1BzFN

19. Current Goods Price Deflation in the CPI https://fred.stlouisfed.org/graph/?g=1BB2K

20. Current Goods Price Deflation in the PCEPI https://fred.stlouisfed.org/graph/?g=1BB2T

21. Current Import Price Inflation https://fred.stlouisfed.org/graph/?g=1BB3C