We know that correlation does not necessarily mean causation. But sometimes you gotta wonder, especially as Mr. Trump’s administration is busily dismantling the CIA. First, GW Bush ignore the PDB of August 8, 2001, on “Bin Laden determined to strike in US”. Then Trump 1.0 eliminates the NSC directorate on pandemic preparedness before the Covid-19 pandemic (and apparently with the exception of Peter Navarro(!) ignores warnings about Covid).
Covered for difference prices as reported by TradingEconomics is jumping up to $7/dozen for January.
MilitaryNews just now:
Trump is not ruling out sending U.S. troops to secure Gaza, saying in response to a reporter’s question: “As far as Gaza is concerned, we’ll do what is necessary. If it’s necessary, we’ll do that.”
You might well wonder why China didn’t retaliate against US soybean exports in the wake of Trump’s 10% tax on Chinese goods. Was it because heavy tariffs were already in place in response to the earlier Section 301 tariffs? No, given the Phase 1 of the trade deal (not that there was ever a Phase 2), tariffs were reduce. Here’s the current situation, from the National Corn Growers Association.
No tariffs yet on Canada, Mexico (and EU for that matter). Still, 10% on $427 bn imports (on top of previous tariffs) is a big deal.
Doug Irwin, my coauthor of International Economics, is in the news today, for obvious reasons.
Through 2/2/2025 (for EPU):
From Heritage Foundation’s EJ Antoni, “Trump’s tariff critics are trading on overblown and unfounded fears”:
CPI food at home is 8% of total CPI weights, fresh vegetables and fruit are 1.1%. Assume half of fresh vegetable and fruit are imported from Mexico (about 2/3 of fresh vegetables are imported from Mexico), and assume only half of the 25% tariff is passed on to US consumers (large country assumption). Then here’s a picture of the CPI for groceries, the January USDA ERS forecast and the implied level of grocery prices, assuming the tariffs are eventually placed.
In nominal dollar terms. Thanks, Trump.