[[{“value”:”Brad Setser estimates the costs at 0.8 percent of U.S: gdp. I am not sure if he is considering exchange rate adjustments in that figure. Kevin Bryan writes: The problem with escalating, again, is that Canada is more reliant on US energy than vice versa, US ports than vice versa, US intermediate goods than vice
The post Sundry observations on the Trump tariffs appeared first on Marginal REVOLUTION.”}]]
Brad Setser estimates the costs at 0.8 percent of U.S: gdp. I am not sure if he is considering exchange rate adjustments in that figure.
Kevin Bryan writes:
The problem with escalating, again, is that Canada is more reliant on US energy than vice versa, US ports than vice versa, US intermediate goods than vice versa, and DT is basically a narcissist. Again: no normal negotiation here, as the tariffs itself have no logical basis! 4/x
The fentanyl excuse seems like a flimsy (and should be illegal) one to let the exec branch set a tariff rate that constitutionally is Congress’ job. But maybe there is some “give Trump a fake win and de-escalate”. I worry about what that does in the future, though. 5/x
Ben Golub notes:
Modern supply chains don’t look like trade theory 101! They involve constant border crossings, each now hit by tariffs. Tariffs raise prices, but the more important thing they do is disrupt supply relationships.
So when a shock hits, you don’t just have a bit less activity by a few of the least profitable firms. You suddenly knock out some of the relationships (contracts) and some of the nodes (companies) in a large and very complex network. This can be pretty disruptive!
Here is Noah’s post. Here is the Yale Budget Lab on likely price effects in America.
Here is an Alan Beattie FT piece on how tariffs often matter less than you think. The size of the costs here can be disputed, but the most relevant fact is that there simply isn’t any upside to the Trump tariff policy. If you think it is about fentanyl, I have a prediction: the price of fentynal will not be rising anytime soon across the window of a one-year moving average. Here are some additional relevant points about fentanyl, which from Canada is not a major problem.
The post Sundry observations on the Trump tariffs appeared first on Marginal REVOLUTION.
Current Affairs, Economics, Uncategorized
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