Be prepared. It doesn’t look good for Wisconsin (just like Trump 1.0 didn’t but this time there isn’t $18 billion on tap to bail out the soybean farmers).
Category Archives: Trade Policy
Contextualizing the Inflationary Impact of the 10%/60% Trump Tariff Plan
I was trying to think about how to contextualize the impact of the Trump 10%/60% tariffs on inflation. McKibbin-Hogan-Noland (2024) trace out the impact of this measure (as well as mass deportation) on inflation using an updated version of the G-Cubed model. In 2025, they estimate inflation will be 0.6 percentage points above baseline. Goldman-Sachs also come up with similar implied effects (although in their scenario, they only assume a portion of the tariffs are implemented)
Wisconsin Exports during Trump Trade War 1.0
A reminder:
“It’s almost as if you have no economics training at all…”
With apologies to Kramer’s boss in Seinfeld. From Oren Cass’s “Trump’s Most Misunderstood Policy Proposal: Economists aren’t telling the whole truth about tariffs,” The Atlantic:
Their first mistake is to consider only the costs of tariffs, and not the benefits. Traditionally, an economist assessing a proposed market intervention begins by searching for a market failure, typically an “externality,” in need of correction. Pollution is the quintessential illustration. A factory owner will not consider the widespread harms of dumping pollutants in a river when deciding how much to spend on pollution controls. A policy that forces him to pay for polluting will correct this market failure—colloquially by “making it his problem.” It imposes a cost on the polluter in the pursuit of benefits for everyone else.
A Fiscal “Do You Feel Lucky?” Part II
Previous counts put Trump fiscal promises at (at least) $4 trillion over ten years, compared to Harris $1.7 trillion (or Economist $3 trillion vs $1.4 trillion). Now, let’s place Trump tax cuts at a cost of $11 trillion…From “Trump Dangles So Many Tax Breaks Even Some Advisers Are Confused,” Bloomberg:
Manufacturing: When Tariffs Last Bloomed
Lest we forget, a visual recap of what exactly happened when Trump started announcing Section 232 and Section 301 measures.
Doug Irwin on CNN: McKinley and Tariffs
A Known Known: Which Presidential Proposals Would Be Implemented
Apologies to Donald Rumsfeld. There is some uncertainty regarding what parts of presidential proposals will be implemented, especially in light of the necessity for Congressional approval. However, one area where legislative approval is not required: tariffs
Reminder: Wisconsin Exports under Trump
If you forgot what the trade landscape looked like — and how Trump’s policies impacted Wisconsin — here’s a picture of Wisconsin real exports during and after (was thinking about this, prepping for WisconsinEye show tomorrow, where Mike Knetter will be talking).
Brad Setser on China’s True Trade Balance
Brad Setser has been diligently cross-checking the external accounts of China. For purposes of thinking about how policymakers are trying to snatch aggregate demand across borders, the trade balance is key.