Why tariffs haven't raised inflation much (yet)
10 months ago
- #inflation
- #economy
- #tariffs
- Trump announces new tariffs: 35% on Canada, 25% on Japan and South Korea, 50% on copper, and others.
- Stock markets are not reacting strongly, possibly due to expectations of delays or court interventions.
- U.S. tariffs are at their highest since the 1930s, with an estimated effective rate of around 17%.
- Despite tariffs, inflation remains low, contrary to many predictions.
- Three possible explanations for low inflation: delayed price effects, foreign companies absorbing costs, or substitution effects.