In the early months of #Trump’s term, importers mostly absorbed those #costs rather than raising #prices to recoup the money from #consumers. Some companies said they were waiting to see if the #tariffs would last. As time has passed, companies increasingly have shifted the costs of the tariffs to their customers. Goldman Sachs estimates that the share of tariff costs borne by consumers has increased from 22% in April to 55% in Oct, & that it will continue to rise, reaching 67% by mid next year.
Discussion
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Discussion
The annual rate of #inflation was 3% in Sept—almost exactly the same as it was on Inauguration Day.
Trump’s failure was predictable. #Prices almost never fall across the entire #economy. When they do, it tends to be because of a crisis, such as the #GreatDepression. Trump is responsible for misleading people. But he has not merely failed to keep an impossible promise. Trump has pursued policies, starting with #tariffs, that are making the problem worse by making life in the #US less #affordable.
One way to see the impact is to track #inflation over the past year. As the effects of the pandemic have worn off, the pace of price increases declined from an annual rate of 3% in January to 2.3% in April. Then, as #Trump’s policies started to take effect, inflation rebounded to 3%. “In some ways, this administration could have come in & done nothing & made progress on inflation,” said Claudia Sahm, a longtime #FederalReserve economist who now works at New Century Advisors, an investment firm.
“But the policies they’ve chosen have created extra costs for businesses, & businesses tend to pass on costs,” Sahm added.
The cost of #Trump’s policies is likely to increase in the coming months.
His most inflationary policy is his campaign to build a wall of #tariffs around the US #economy. Tariffs are #taxes on imports, & they are *initially* paid by the businesses that bring goods into the #US.
#FactCheck #TrumpLies #inflation #affordability #CostOfLiving #recession #trumpcession
In the early months of #Trump’s term, importers mostly absorbed those #costs rather than raising #prices to recoup the money from #consumers. Some companies said they were waiting to see if the #tariffs would last. As time has passed, companies increasingly have shifted the costs of the tariffs to their customers. Goldman Sachs estimates that the share of tariff costs borne by consumers has increased from 22% in April to 55% in Oct, & that it will continue to rise, reaching 67% by mid next year.
As the NYT board has noted in previous editorials, the revival of domestic manufacturing is a worthy goal, & if #tariffs were applied judiciously, the benefits might outweigh the #costs. But #Trump’s indiscriminate use of tariffs is doing far more harm than good. The current tariffs will cost the average #US household about $1,800 per year, the Yale Budget Lab estimates.
The admin’s crackdown on #immigration is similarly being conducted in ways that maximize the economic costs.
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