Ten things you should know about Trump’s tariff, but I was afraid of the question

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Donald Trump Continue his threats 25 percent of the tariffs were imposed on Mexican goods and non -energy products from Canada, 10 percent of the tariff on Canadian energy and 10 percent on Chinese goods.

“The definitions are about making America rich again and making America great,” the president told Congress on Tuesday evening. “There will be little turmoil, but we are well with that. It will not be much.” This was his confidence that he promised more fees on imports from Europe, South Korea, Brazil and India next month.

International macroeconomics is difficult and It is clear that Trump did not realizeHere are 10 things you should know about its tariff.

First, it is great. Those in Canada, Mexico and China raises the average tariff on American goods imports from 2.4 percent in 2024 to about 12 percent if trade flows remain unchanged. So this is an upper estimate, but the result will be the American commercial barriers He has not seen since the Second World War.

Second, it is important to remember that the importer pays. Definitions It is a tax imposition on goods that cross the borders.

Third, although the importer pays, the issue of the final cost is more complex. The American supply chain felt the pain of the vast majority of costs after the 2018 tariff and we should expect something similar today.

Fourth, although the customs tariff imposed so far is possible Collect 142 billion dollars for the United States TreasuryThis is less than ten 1865 billion dollars are expected to deficit in the US federal government In 2025, any behavioral change is assumed. Definitions do not solve financial urinary incontinence.

Fifth, with goods benefit approximately 10 percent of GDP, the customs tariff rate is likely to increase by 10 percentage points of consumer prices by approximately 1 percent. This rough account is similar to the most advanced estimates, such as those From Boston Federal Reserve employees this week.

Sixth, the high prices are different from inflation, although consumers will be connected in my country. There is no doubt that in the wake of great inflation during the past few years, there is a greater risk than prehistoricism that companies and families will seek to avoid completion when prices rise by demanding compensation through prices and high wages constantly. This is inflation.

The seventh, the United States is a very closed economy as the total merchandise trade was as a share of GDP 19 per cent in 2023, Compared to 53 percent in Canada, for example. This is despite Trump’s speech that imports kill America and explain the reason for hearing American threats with a louder voice from the house.

Eighth, the harmful effects of definitions on the supply capacity of the American economy put up ascending interest rates. On the contrary, the rise in the event of uncertainty caused by Trump’s actions reduces investment intentions and adds the declining pressure to rates. Investors They became more worried Around the latter, but the interest rate expectations are still rising since the elections.

The ninth, definitions are far from reducing the trade deficit, which exists because the United States consumes more constantly than it is produced in full work. A way to ensure a decrease is to generate deep stagnation, and reduce the demand for imports.

The tenth definitions are unlikely to have common tariffs. Raising prices and obstructing imports by throwing graphics in the trading system is a winner of public opinion. Britain’s exit from the European Union, which did the same, is now unpopular in Britain, and Trump’s understanding of the public’s hatred of high prices in his election campaign. The audience is unlikely to look at a little disorder.

However, one of the groups that will be quietly excited about the Trump tariff mania is economists. Explanation of the mysterious policy is a great business and will create some great data data sets for years to come.

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