Here's what experts say about how the trade tariffs might impact the US economy



multiple forecasts and studies are now out gauging the impact of the new tariffs on the US economy most are not pretty and Steve Liesman is here with the details of these it's already happened the economist kind of skipped the idea of even valuing the new tariffs and went right to valuing the next round because now that's the base case the base case now is that they're gonna have this 325 and we talked about this a month ago that this idea of tariffs get ready for it's gonna stick around guys and so guys go right to the chart here and I'll show you what just a smattering of some of the so Goldman says GDP will come down by 50 basis points no more a little less pessimistic 30 basis points Morgan Stanley sees a 25 basis point inflationary effect and the New York Fed said all this will cost household through all the different methods for different ways this happens if they can remember that where they are prices confidence what's the fourth one the third one and it launders needed weight loss not great that deadweight loss so I got the other ones later but here's some of the commentary that we've gotten on this Goldman Sachs's the effects would be large because the experience with the initial 2018 tariff trances should quite sizable price effects Nomura writes there appear to be few readily available alternative sources for many of the consumer goods included in the new round of tariffs we expect most of the impact on GDP was to come from lower business investment and so this is the most interesting one than the New York Fed says importers are induced to shift to ever more expensive sources of supply as the tariffs rise and we do not have an estimate as yet from the administration it doesn't appear it has modeled any of the economic fallout but so let me just talk about this dead weight loss idea all right and this is from the New York Fed's paper if you have a product that cost 100 and it goes to 125 and you look for another source for that product you're gonna end up somewhere below 125 but still above a hundred right and by the way the downside of the importer going to or the padishah go to another country is we don't get the tariff revenue from that so if they go to Vietnam and they're gonna 120 420 300 whatever it is on the 20 it's still 20 bucks more expensive but it doesn't go into the u.s. cough WS coffers and the importer or the story the producers spent the time and the energy to find this other source and that's part of the dead waste we talked about this the other day on an halftime is it inflationary or is it deflation yes okay here's here's the way and we have a eminent economist who's gonna answer this and it's just second but I'll say real quickly inflationary on the front end because prices go up and that just effect potentially deflationary on the back end as a result of reduced economic growth so that's the that's some of the thinking you

9 thoughts on “Here's what experts say about how the trade tariffs might impact the US economy

  1. Vietnam is not a viable alternative for many companies as the country lacks the infrastructure of ports, rail, and roads available in China along with a work force that is no comparison to the Chinese in terms of education etc.

  2. The boycott against US products you see in China will hurt China exposed companies like Apple and Tesla. China doesn't even need to use tariffs, Chinese just don't want to buy US products anymore.

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