Posted on 07/28/2025 3:41:35 PM PDT by nickcarraway
No economy rises or falls for just one reason, even a shock as big as Donald Trump’s trade policy, says Ruchir Sharma for the Financial Times.
At the beginning of the year, the world was in striking agreement on one point: If Donald Trump went ahead with tariffs, it would strengthen the dollar and trigger stagflation. Chief executives, investors and commentators all said the same. Economists estimated that every percentage point increase in the tariff rate would shave 0.1 per cent off US growth and add 0.1 per cent to inflation. But so far, the consequences have been far less disruptive than just about anyone expected.
Some analysts still think that’s because Trump’s threats have been mostly posturing. But the effective US tariff rate has already risen from 2.5 per cent to 15 per cent. Tariff revenue is rolling in at an annual rate above US$300 billion, roughly four times the pace this time last year.
Many economists had assumed that, by lowering imports, tariffs would strengthen the dollar almost automatically, as an accounting identity. Instead, it suffered its worst fall over the first half of a year since the early 1970s.
(Excerpt) Read more at channelnewsasia.com ...
It’s a Dismal “Science”.
China hates paying U.S. tariffs. They miss the good ol days of paying Biden directly.
PING!
Are you trusting Lutnick and Bessent, yet? When Powell budges, look out.
The value of one nation’s markets should never go uncompensated. “Cost, Value, Benefit” is an important reality. If the goods, commodities, and services you have to offer are in high demand, others will need to pay a premium to access those things.
What we were doing wasn’t working. I’m still a positive wait and see. I will admit it if I’m wrong.
Economics isn’t really an exact science.
Give it time, the cost will trickle down to the consumer. $300 billion in new tariffs offset by $300 billion in new tax reductions. A new brand of Net Zero.
For 30 years, I worked at a commodity producer.
One that had a 95% lock on market share.
On every pricing call, our biggest concern was raising the price to such an extent that it would create competition.
People that are being tariffed will absorb the costs
Every prediction about what would happen as a result of Trump’s tariffs was wrong.
Yes, and there are many here who still don’t get it.
LMAO!!!
The article does mention that the dollar has been taken to the woodshed since January, that isn't a great thing for savers and regular Americans.
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