Well imports = what? 13% of the GDP
(2% services and 11% goods I think)
A 20% tariff on imported goods . . .
if 100% of it is passed on to consumers is ummm . . .
2% x11% = 2.2%
But of course it will be less.
Truckers will not charge 2% more just because the border price of tomatoes went up
Walmart will not pay 2% more rent just because the border price of tomatoes went up.
Hypothesis:
Some people are trying to scare you with spooky scary made-up worrisome numbers. If you keep these facts in mind you will be less likely to believe them in the future.
Iâve read plenty. Most believe the net yearly median loss will be in $3.5-4K range per year. Less for low income ($1.5-2K). Those numbers may sound trivial but arenât for everyone, especially low income. Those numbers are also in a bubble. They donât account for potential increases in inflation, recession with loss of investments/retirement plans or job loss. A 2% increase due to tariffs on top of the current 2.8% CPI still appears to the consumer as a nearly 5% increase. Were people satisfied with a 5% CPI? (Items facing tariffs are subject to inflation so would increase just as everything else. They wouldnât be flat amounts based on the day they were implemented.)
The price level from all 2025 tariffs rises by 2.3% in the short-run, the equivalent of an average per household consumer loss of $3,800 in 2024$. Annual losses for households at the bottom of the income distribution are $1,700.
The Trump tariffs will reduce after-tax income by an average of 1.9 percent and amount to an average tax increase of more than $1,900 per US household in 2025.
You have better data than The Budget Lab at Yale or The Tax Foundation?
If they donât buy because they donât want what we have to sell thatâs one thing. If they donât buy because we arenât allowed to sell because of tarrifs, thatâs another. Trump wants FAIR trade, heâs not just wanting to punitively punish countries or companies for no reason.
They did make some faulty assumptions further down (bad denominator I suspect) , but as far as the current discussion, maybe the problem isnât your sources after all.
I wasnât implying my 9% number was used to give the values per household. That was an upper limit since most feel that inflationary number was much too high.
Like I said, a 2% tariff increase added to a 2.8% CPI has a net impact of around 5%. That is lower than 9% but still an increase which would not be there without the tariffs. It is somewhere around $2-4K gone per household which would not be there without tariffs. If that is acceptable? If the economy worsens, inflation increases, unemployment increases, etc, what value is âtoo costlyâ for this tariff experiment to be worth it? As long as itâs under 9%?
Well what is more likely to happen (far more likely than 9% inflation)
is that when the price of tomatoes at the mexican border increases 20%
prices of the imported subset of tomatoes in US supermarkets will increase 2%.
US tomatoes producers will get a lot more customers
(nearly 60% of tomatoes in the US are already produced domestically)
You know, we used to grow tomatoes in NJ.
I wonder if weâll start doing that again?
Keep in mind, once the tomato industry here died, rich Manhattanites got really cheap places to keep their horses. Horses are now our #1 farm animal
(42,000 horses on 140,000+ acres) so . . . SOMEBODY might find their prices going up more than 2%.
ETA. never know how much to trust MS CoPilot.
But it generated this table for me earlier.
