The Wall Street economist sees two ways that can play customs tariffs – and it is not good for the normal factor

But on the ground, he warns that the consequences of President Donald Trump’s renewed wars in the roads that will strike the most difficult ordinary Americans.

“We have not seen the definitions of these types of levels in the United States for several decades,” he said. luck While on the way to Zurich. “Thus, the implicit meaning of this is that we learn how definitions affect the economy in an actual time.”

The papers, which were also served in the administration of former President Barack Obama as the best economic diplomat in the US Treasury, are estimated that American consumers currently carry about 30 % to 40 % of customs tariff costs – but this number is preparing for an increase of about 60 % as companies run out to accommodate higher import rates. “Companies cannot absorb a lot,” he said. “They will need to push more to the consumer.”

The leaves are not alone among the economists in Wall Street in the argument of this. Earlier this week, the chief economist in Morgan Stanley Michael Gabn said that companies were absorbing the strike as much as possible, and the definitions were actually.Capital tax“At least so far.

The papers were added, although they are uneven. Goods have accelerated in many categories since the tariffs have entered earlier this year: 15 % vocal equipment, furniture and bedding approximately 7 %, tools and devices about 4 %.

He said most of these imported products – the things that appear in your home, not your grocery cart.

Slow pressure

Sheets believes that retailers will skillfully pass the effects of customs tariffs, through the main “pricing windows” when they may already raise prices, as is the case during the holiday and new shopping season.

He said that companies can do this, because they were stored on the stock before imposing a customs tariff and the decline in these cheaper supplies. But that pillow runs out.

He said: “We started to see him.” “By spring, it will be more clear in the data.”

The institutions said that companies are on a high line: consumers are still “exhausted” from inflation after birth and not in a mood to bear another wave of prices in prices, but companies cannot continue to eat costs forever.

He added: “One thing you do not want to do is raise your price, make your customers crazy, then adjust the definitions down.” “So they carefully judge their ability to pass it, and the timing they are doing.”

Manufacturing

Sheets warned, the second method that the customs tariff can play is through a kind of intelligent eating tail effect: hurting the same American manufacturing base that is supposed to protect it.

“There is an essential fact here,” he said. “The rates of wages in the United States are relatively high. If you are going to use American work and pay competitive wages for them, there are just certain types of manufacturing activities that are difficult to do in a profitable manner.”

He said that this is the reason that many jobs have turned to China and Mexico over the past forty years-because why the customs tariff may restore factories, but in a “dense capital” way: think about the Otons, not more workers.

“Companies will say,” I cannot pay our wages for this activity, so I will just fully automate, “she said. She said.

Trump, on “Liberation Day”, I promised To enter the “Golden Age” to manufacture and produce production through definitions. But sheets argue that he may have accelerated the batch to automate factories through artificial intelligence and advanced robots, making it easier than ever running a factory with fewer people.

“We have seen this with the computer revolution,” said the economist. “Some jobs fade, new jobs appear, but they are not the same jobs.”

Global arrangement fragile

The papers said that at the present time, most of the allies follow the approach of “waiting and see” instead of revenge for their definitions, so much that they are still dependent on reaching the American market.

But he warned that if more countries follow the progress of Washington and the customs tariff for weapons begins, the global trading system that defines the post -war era can begin to break.

he Compare the situation To the early thirties of the last century, when the SMOOOT-HWLY tariff has sparked widespread revenge and collapse in global trade that worsened the great depression. At that time, the world turned inward, and the result was “destroyed”. He warned that, thank God, other countries are not following the leadership of the United States – so far.

However, Sheets said he believed that there is room to rethink – not to give up – the economic system that has been held for decades. World leaders did about forty years – in the 1940s, they reached the International Monetary Fund and the World Bank, and in the 1980s and 1990s with the development of the World Trade Organization.

“Maybe it’s time to do more deep thinking about how to get an effective global commercial system,” he said.

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