What happens if costs for all Chinese imports rise by 20 percentage points?
PCE prices are estimated to rise by 0.5 pp. Tariffs on final goods lead to a one-time increase in prices. Tariffs on intermediate goods lead to more persistent effects https://www.federalreserve.gov/econres/notes/feds-notes/how-do-trade-disruptions-affect-inflation-20250228.html
PCE prices are estimated to rise by 0.5 pp. Tariffs on final goods lead to a one-time increase in prices. Tariffs on intermediate goods lead to more persistent effects https://www.federalreserve.gov/econres/notes/feds-notes/how-do-trade-disruptions-affect-inflation-20250228.html
Comments
FUD is never good for a market, or an economy.
The trump admin has optimized for loyalty at the expense of competency. While the effects will be unpredictable, the results are entirely predictable. Instability.
I immediately wonder, what is the ratio of imports from Canada, Mexico, Europe + China to China?
Rough guide to what we are looking at if Trump goes through with this.
Also, the inflation is presumably mitigated in part BY the endogenous growth weakness.