“So China is now paying us billions of dollars in tariffs”

That’s economist Trump in 2018, as cited in Coy (2018). Now, from USITC “Economic Impact of Section 232 and 301 Tariffs on U.S. Industries” (page 22), a conflicting assessment.

The Commission’s econometric model estimates that tariffs under  sections 232 and 301 resulted in a nearly one-to-one increase in prices  of U.S. imports following the tariffs. This implies that a 10 percent ad  valorem tariff raised the price of U.S. imports from China by about 10  percent. This nearly complete pass-through (meaning that prices  received by exporters were largely unaffected and prices paid by U.S. importers increased by the same amount as the tariffs) is unusual but has been similarly found by other recent studies, which conclude that U.S. importers have borne almost the full burden of section 301 tariffs.

Continue reading

Banking Turmoil: Deregulation vs. Monetary Profligacy (vs. Unanticipated Events)

I keep on hearing this refrain from people like former senator Toomey (on Bloomberg TV today) that the 2018 deregulation had nothing to do with SVB’s travails; rather its problems (presumably also Credit Suisse’s too) was due to monetary and fiscal profligacy. I thought it would be useful to recap the path of expected interest rates.

Continue reading