Does anyone see a scenario in which tarrifs don't cause more inflation?
Discussion
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No if priced in dollars. Go long in Bitcoin. You should be ok.
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End income tax and dramatically cut spending.
So no, no realistic one lol
If the resulting economic downturn outweighs the inflation it causes
Will tarrifs increase the money supply?
This is the correct question & path
Inflation can localize in sectors due to human nature. See the housing bubble.
Tariffs will direct some of the existing ongoing inflation into Tariffed sectors and goods.
They will in Canada, Liberals are already contemplating covid like "benefit" payouts for tariff "relief". So Canadian citizens are gonna get drug through the mud in multiple ways.
Not necessarily, but there are many steps between monetary inflation and price inflation. I think tarrifs will hit the gas on many of them.
Goods that are also available from other non-tariffed sources will not experience any inflation.
Incorrect. If you are subject to Tariff and raise your prices I can safely raise my prices by only slightly less than you and pocket the added profits.
Any profit driven company will take this course.
All it takes is one competitor to not raise prices to capture most the business.
If there is more than 1 company not subject to the Tariffs. We don't manufacture much so it may be 0.
You also have to remember that very few products you buy come from a perfect local vertical monopoly. Any inputs under Tariff? Your "American made" good costs more. Any key employees demand a raise to cover their personal increase in costs? Passed on to the consumer. It'll take a minute but this will raise prices on everything.
It only affects tariffed inputs that cannot be sourced elsewhere.
Some items will experience inflation, but most will not.
There will also be deflationary forces caused by the tariffs competing with new inflationary forces. For example, reduction in illegal immigration is deflationary for rents, a key COL concern for many.
If I change source for my input to a non tariff source that raises my costs which raises my prices. I have the cost of the change and the increased cost of the input. After all, if that source was cheaper I would have switched before the tariff.
The primary driver of housing and rent prices is the investor class believing that they can buy property and profit without a tenant because of inflation. Most cities are full of vacant units. The more expensive housing is the more vacant units in that city.
Our conversation has already lasted longer than the Mexico tariffs, yet the benefits of imposing those tariffs will last for years.
The price effects of tariffs is a moot point when compared to the longer-term benefits.
Tariffs are the right call.
People love being bullied. I'm sure this will bring us decades of good will from those countries.
Standing up for yourself is not bullying.
Abusers always get offended when you prevent their abuse.
And narcissist always claim everyone is out to get them to excuse treating everyone else like shit. 🤷♂️
Enforcing border laws long-term through short-term tariffs is not 'treating everyone else like shit'.
It seems you're unwilling to admit that a strategy you thought would not work is working.
I think you are a statist and I am not.
People want to cross the border to find a better life because both governments have laws that create a massive wealth disparity across an imaginary line.
Perhaps more laws and more government control won't help. It only introduces more violence and suffering into the world.
You would be correct to say that less fentanyl trafficking and less human smuggling does reduce violence and human suffering in the world.
The narco wars are another problem created by state regulation. Until you see that government caused the problem you have by "fixing" another problem, will continue to think of government as a solution.
You would also be correct to say that governments allowing unchecked illegal immigration and unenforced border laws is the primary source of income for violent cartels and gangs.
No. They want it.
any increase to the cost of getting the good to market will result in a higher price to buy the product at market, so no.
I suspect it will be used to obscure the real cause of inflation.
They did something similar during COVID.