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mathematic

(1,567 posts)

13. Tariffs are a tax and have disinflationary effects via reduced aggregate demand

Reply to BumRushDaShow (Original post)

Tue May 13, 2025, 12:04 PM

May 13

It's not straightfoward if the tariffs will reduce inflation due to this disinflationary effect or increase inflation due to reducing productivity (from taxing more efficiently made foreign goods). Or if short term effects like the price shock raises inflation expectations (which feed into realized higher inflation).

There is a lot of second-rate economic analysis that has gone on with respect to the tariffs. The only thing you can say for certain is that we will be poorer than otherwise if none of this tariff policy existed in the first place. Neither recession nor increased inflation are guaranteed.

Also, we are not in a recession right now. Q1 GDP will almost certainly be revised upwards as better measurement of Q1 business inventories and Q1 consumption come in.

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Highlight:

Annual inflation rate hit 2.3% in April, less than expected and lowest since 2021 [View all] BumRushDaShow May 13 OP

Are these the real numbers? gab13by13 May 13 #1

I can't believe anything coming from this administration. groundloop May 13 #5

The original reads like the usual BLS no-style style. mahatmakanejeeves May 13 #2

Hell...when Trump tariffs destroys the economy those numbers could be 1.5% Bengus81 May 13 #3

It's possible the tariffs don't destroy the economy. Self Esteem May 13 #10

30% on China good right now is HUGE. Just not as ridiculous as 145% Bengus81 May 13 #12

And it's still possible it doesn't impact the economy like many claimed. Self Esteem May 13 #14

bottom line is Skittles May 13 #19

Ok, so it rose a little bit? mwmisses4289 May 13 #4

I still am waiting for all the deflation in prices the orange buffoon promised. mdbl May 13 #6

Have the effects of the tariffs rippled through to store shelves? HereForTheParty May 13 #7

I smell Sharpie. twodogsbarking May 13 #8

Fortunately, you can compare prices yourself. Self Esteem May 13 #9

The expectation is that prices will go up so when they don't go up as much as projected it is a win for us. twodogsbarking May 13 #16

DOGE Boy math? ... littlemissmartypants May 13 #11

Tariffs are a tax and have disinflationary effects via reduced aggregate demand mathematic May 13 #13

Graphs - rolling 3 month average and month-over-month, both annualized progree May 13 #15

That can't possibly be right. rsdsharp May 13 #17

Trump calls on Fed to cut rates, saying prices of 'practically everything' are down, Reuters, 5/13 progree May 13 #18

Economic policies usually have a lead time to take effect. This low inflation rate we are seeing now totodeinhere May 13 #20