Posted on 04/04/2025 4:30:55 AM PDT by MtnClimber
Tariffs will not cause inflation in the long term. In fact, they will likely lower the cost of goods over time.
On April 2, Liberation Day, President Trump imposed reciprocal tariffs across the board. The President noted that they were “kind” tariffs, since they were only half the rate that American producers are charged. For now, at least.
Critics have lamented that tariffs will raise the cost of goods, as if the Constitution codified the right to buy “cheap” Chinese goods.
While there will be an adjustment period -- as with any major policy shift -- tariffs will not cause inflation in the long term. In fact, they will likely lower the cost of goods over time.
Asleep at the Wheel
Over the last fifty years, the American people have been subjected to an experiment with economic globalism. This has hollowed out American industries, destroyed millions of jobs, and endangered America’s national security. The one benefit that the public as promised was that goods would be cheap -- that the cost of living would go down.
This was a false promise. Compare recent history: President Trump’s tariffs did not raise the cost of goods during his first term. Meanwhile, inflation was rampant during President Biden’s term, despite his walking back most of President Trump’s trade agenda. Further, America had the highest average tariff rates in the world during the nineteenth century, during which time America’s industry flourished and the cost of living decreased year after year.
In addition to the evidence, economic logic reaches the same conclusion. Tariffs are taxes on imports. Accordingly, they can be entirely avoided by buying American. This creates a strong incentive for foreign producers to lower their costs. That is, if countries like China or Mexico want access to America’s
(Excerpt) Read more at americanthinker.com ...
We are entering a negotiating period where we now have leverage to get other countries to lower their tariffs on our products if they want us to lower tariffs on their products. These other countries may need to reduce their welfare state handouts to reduce government expenses to compensate for lost tariff revenue from the USA.
Trying to stay positive, but it looks like the ultimate Black Swan event
I wish people would be careful about terminology.
The question really is: “Will Trump’s tariffs cause prices to rise?”
Inflation is always and everywhere a monetary phenomenon, caused by the Government when it raises the money supply. Inflation has nothing to do with tariffs, and tariffs have nothing to do with Inflation.
And, as to prices, Trump’s tariffs may cause some prices to go up, and some may come down. But a lot of foreign investment in the US is coming in, and it will increase. There will be good jobs and good wages. There will be huge economic benefits to Trump’s tariffs. If some prices do rise in the short term, we need to just handle it.
When Reagan came in, he did have an inflation problem, and it took a couple of rough years to tame the inflation that got out of control in the 70s. But Reagan fixed it, and after those first two years, we had a massive boom. This basic pattern is going to repeat with Trump. Good times are ahead.
The 2026 election will turn on “it’s the economy, stupid”.
If people who vote in the election don’t consider them better off economically, the party in power will lose. It’s played out over and over again.
The media is trying to cause panic to hurt Trump’s approval numbers.
The tariffs will cause both price deflation and put more money and power in the pockets of individual Americans.
like staying positive at the gym when you have reached the pain limit that makes so many less positive about getting stronger? remember friends...no pain no gain applies to every aspect of life that requires work and dedication. but the results will be (in my best Trump voice) MAGNIFICENT!
The negotiations will take the form of bribes paid directly to Trump.
My family has been on these shores almost 400 years.
We’ve seen worse.
Printing money creates inflation not tariffs. Just like tax increases do not create inflation printing money creates inflation.
???
Yep, all of the COVID Relief spending and even the “Inflation Reduction Act” spending caused much of our current inflation.
I don’t think this is true. In many industries and business operations, inflation is primarily caused by excessive and/or completely unproductive regulations. In fact, I suspect the high inflation figures over the last four years were mainly attributable to this, and not money supply.
You’re telling me the cheap Chinese crap we buy on Amazon won’t be cheap anymore?
“Accordingly, they can be entirely avoided by buying American.”
Which will cause prices of those American goods to go up with the higher demand.
The price for oil has fallen to $62/bbl over the last few days. Let’s hope we see some commensurate price drops at the pump real soon. Lower energy prices will be felt throughout the economy. That should help.
The lack of long term planning and substance coming out of the WH is not supportive of holding the line on tariffs and the consequences of decoupling. The market and other countries can squeeze Trump to the negotiation table. There is no pressure on China to change, they can wipe out millions there without a concern for blow back.
China just added 34 percent to their tariffs. I didn’t even think they were on the list.
Milton Friedman says you’re wrong.
“Inflation” is a shortened term. The full term is “Inflation of the money supply”.
Excessive government regulations are a problem. They drive up costs and that results in price increases. But it’s not inflation.
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