The mainstream economists have warned that the President Donald Trump, when the President has signaled a comprehensive reinterpretation of the international trading system, that has not been observed for decades that prices would rise.
The mantra, repeated from all from mainstream economists to Grop factionsIt was clear: a tariff is a tax for consumers. Companies said the same thing, with three four of importers in a recently explained by New York Fed study that they were planning to plan them pass along Some tariff costs for customers.
But in the middle of the year and until the result of the consequence of trading in half a century, action is missing in half a century.
The tariffs are certainly available: the finance minister $ 100 billion In customs tasks and is on the right track to collect 300 billion US dollars this year. The tariffs are Paid by US importers-think Walmart And other retailers – if the border exceeded the United States, it takes some time to work on the system, but after all, higher prices are passed on to consumers. These higher prices directly influence the total price level of inflation measures.
Unless there is a mystery that is wrapped in a mystery and is covered in a puzzle. One place tariffs don’t appear? In the number of inflation.
Official inflation readings of the Bureau of Labor Statistics have been accompanied by expectations for four months, with the latest inflation being read relatively modest 2.4%. The Council of the President’s Economic Advisor (CEA) published A this week meager argue that import prices have actually dropped.
Why don’t the data show a tariff hit? The following told leading economists Assets.
It’s too early
Although the tariffs have been discussed for months, they have not been there for months.
“With regard to the effects of tariffs on the prices, the time frame used by the CEA is far too short to draw final conclusions” criticism In the study that the prices examined by May. “Trumps 10% not RecipleCal tariffs were only imposed in April.”
Customs on steel and aluminum came into force in March and increased in June, while the Chinese imports have been subject to a 30% tax since March. Dozens of other “mutual” tariffs, which were announced in early April, have now been postponed.
In the meantime, the government’s official prices need time to collect and publish. From mid -July the latest data for the Consumer price index and personal consumption expenditure deflator, Covers May.
Large companies are stored
Immediately after the tariffs had been announced, importers hurried to bring in before they were exposed to a higher sentence. Companies brought so many goods without corresponding sales that the USA turned it back. GDP in a negative area. (In the math of economists, imports count as negative to GDP.)
This increase means that companies could still largely sell from the prices before the tariff.
“Companies stored the stock and probably did not have to increase the prices for goods because they are sitting on the shelf. After all, they will do it and as soon as they start increasing prices, they will influence consumers,” said Eric Winograd, head of US economy at Allianceberg to explain this theory.
Nobody knows how much prices should increase
According to Eugenio Aleman, Chief Economist at Raymond James, uncertainty with one word is “the most important reason”.
“Business owner Price of your goods at replacement costs. If you have to buy the same good in the future, you will have to increase the price (charged with the customer) if the replacement price is higher,” he told Assets. However, the problem is uncertainty. “Everyone knows that the prices that companies pay for replacement goods will be higher, but nobody knows how much uncertainty stops from preventing many companies from repeating their goods.”
It comes from winning instead
Companies, especially small companies, could initially eat the costs for tariffs. In contrast to large companies, they have a smaller customer base and could reluctantly increase prices, said Aleman.
“Maybe small companies eat a large part of the tariffs. Why? Because they can’t afford to lose customers,” he said. A potential data point that shows this option are the latest figures in the trade department, which show the growth of the owners’ income – a deputy for small companies –Flatline in May. Aleman emphasized that more than a month would be necessary to determine whether this is the case.
Youngest Bank of America Studies show how many tariffs are almost paid for by small companies in May doubled from 2022 Levels. “In a way, small companies can be more susceptible to printing the tariff than larger companies because access to capital is more limited,” says the note.
You are afraid of Trump
An additional factor is the bullying pulpit of the truth that Trump has freely managed even among the largest retailers who think about hiking costs.
“If the president sees a significant passage of the tariffs over the prices, you will probably see a lot more public politics Twitter“Jeff Klingelhofer, Managing Director at Aristotle Pacifictold Assets.
Customers do not pay higher costs
Klingelhofer previously suggested that companies would take the main burden of the tariff effects because they are the only ones that could afford it and that consumers would be “equipped” after years of high inflation. The former Federal Reserve Economist Claudia Sahm also found that companies today increase prices less quickly than during the Pandemic Inflation when the Americans were flush with cash and wanted to spend them.
In 2021 and 2022, consumers had the distribution of income up and down, had some cash, and there were many company results that said we are saying goodbye to these (costs), and the consumer could somehow avoid it ” Assets.
Three years later, the Americans spent all out excess savings While Covid is accumulated and companies “realize that if they increase prices dramatically, they may lose customers,” she said. “There are more hesitation. There are a few prizes, but not the exuberance of the pandemic.
Inflation could never come
This is the position of Mark Diplacido, political consultant at American compassA conservative economic outfit that supports tariffs to replace the US economy again.
“Foreign exporters ultimately recorded a lot (the costs) and companies – very little consumers came to consumers at this point,” he said. He found that Japanese car manufacturers lower prices – sometimes almost 20% – to compensate for the additional costs that the US buyers will pay. In other words, “Japan and Japanese companies eat the costs of tariffs.”
Every economist Assets spoke with a version of this point – that a tariff instead of giving an empty check instead of giving a seller to increase prices triggers a complicated negotiation between importers, exporters and American end buyers. Finding the balance, the party of which pays how much time will take and will be individual for every good and economic sector.
“Customs are a tax on imported goods,” said Sahm. “Nobody wants to pay the tax, so who is the weakest limb? Walmart can go in and tell their Chinese manufacturers that they have to reduce the price. ‘ Maybe the consumers in pandemic said: “Ok, I pay it – I’m not really happy about it, but I have the money.”
The final answer, she added, “can be very specific for business, the industry and also the general macroeconomic conditions.”
