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 ...
Tariffs won’t cause inflation because inflation is caused by the government printing money too much in an attempt to generate consumer demand. But Tariffs will reduce our living standards.
Bingo another way how Inflation works
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.
This is my concern as well. If he is going this route, then we need to get the tax cuts made permanent or at least extended before 2026.
Additionally, if SC justices Thomas and Alito (both of whom are solid) are considering retirement, they need to do so while Trump has a Republican majority in the Senate so he can replace them with some young, constitutional-adherent justices in the same vein as Thomas and Alito.
"Inflation" is a shortened term. The full term is "Inflation of the money supply".
This is flat-out wrong. When the government reported inflation figures for February 2025 and posted a 2.8% inflation rate over a 12-month period, it was absolutely not reporting the change in the money supply. It was reporting a broad average of price increases across a range of products and services. And those price increases are caused by several different factors. The example I cited of excessive regulation is a classic example of "cost-push" inflation -- where rising costs for producers result in higher prices for the products and services they sell.
To get back to Friedman ... Using money supply as the sole cause of inflation is overly simplistic. Recent history shows us why this is the case. In the early days of COVID in 2020, for example, we saw massive declines in the prices of many things even as the U.S. government was flooding the nation with more than a trillion dollars in "stimulus payments." You could have rented a car for a fraction of its pre-COVID cost. And the price of motor fuels had dropped so dramatically that we saw President Trump making a deal with Saudi Arabia and Russia to slash oil production in a desperate attempt to prop up the price of crude oil. That was in response to an alarming drop in the price of oil that saw West Texas Intermediate drop below $23/barrel and threatened to decimate the U.S. energy sector.
What these examples show us is that money velocity is just as important as money supply in its impact on prices. If the government handed every U.S. citizen $25,000 in cash and we all hid the money in our closets, there would be NO inflationary impact. But if the government handed everyone a $25,000 debit card with the stipulation that we had to use it within 48 hours or lose it, you can be sure this would drive up prices for many things as people ran around desperately finding anything to buy.
That is correct, IMO. Particularly, people on modest fixed incomes (or nearly so) are not going to wait 5 years to see how things play out. Others already hurtin’, like farmers, are nervous too.
denial is not a strategy. your characterization of trump as a lame duck is not true.
misrepresentation is not an effective strategy against MAGA either.
China is under GREAT pressure... and they will attack to try and seize Taiwan. It will be a very big mistake.
One cannot SQUEEZE Trump to the table, since he is the one who is dragging them there in the first place via the now verified threat of higher tariffs.... and that is to deal their with unfair and unbalanced tariffs and trade barriers.
The common Chinese populace... has the power to collapse the CCP from within, and they are the vast majority.
You fail to grasp that other countries are not bothered by our political timelines. China can lock down their country for years without political blowback, the idea that they are gonna run to mommy because of Trump's threats, not gonna happen. All this tariff talk only fuels their nationalist and actions, their gov loves it.
This isn’t a black swan at all. Trump said what he was going to do weeks ago. He even gave a date.
Honestly, I think a lot of “systems” were simply looking for an excuse to bail out of the markets.
If you were a financial market trader, you “should” have been buying puts for the past week and riding this market down. This was as obvious as the COVID sell off around the same time in 2020. If you were paying attention, it was obvious what was going to happen.
That said, in the next few weeks there will be lots of negotiations which will result in favorable results. A good example is Vietnam.
Finally, I graduated from college in May of ‘82. This was at the depth of the Reagan recession as a result of his tax policies. By the end of ‘82 things started turning and by ‘84 things were humming.
Think we are in a similar situation. The tech companies will continue to perform well. But you will see some improvement in manufacturing, which has taken a hit over the past ten years or so.
Markets like to “react.” These days it seems everything is “magnified” as a result of social media.
I am willing to give this six months to a year and then we can see where we are.
I agree. The money supply spike preceded the inflation mess by several months. It takes time for that money to make it through the “bidding” process to where it lands in the pockets of the consumer. COVID provided the supply shock element.
This will pass. It’s been 24 hours. The pundits need to take a breath and see what happens.
It’s either going to be a masterclass that will be repeated in the future. Or it will be an unmitigated disaster that will lead to the end of all humanity. Either way…I can’t influence it one way or the other. Ha Ha.
The man is a hero. Bribes? Hardly.
Which begets more supply. Lather,rinse. Repeat.
You are right but not stating it correctly. Inflation is caused simply by "to many dollars chasing too few goods". So what you meant to say was the regulations are hurting production and artificially decreasing the supply. This is what is causing the inflation in this case.
Farmers LOVE import tariffs.
If that were to happen I worry that our American Free Traitors™ will have hard time getting back to their motherland - mainland China. They may have to stop posting here and go underground.
Yep. Still winning. American companies that screwed the US economy by going overseas need to pay similar taxes, and they were supposed to, but Clinton saw to it they didn’t.
How did we end up on the same team? This is creepy.
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