As international tourist arrivals have risen globally, those for the US have declined, as noted here.
You Ain’t Seen Nothing Yet
Taxes announced, proposed, on Chinese imported goods. Or, shoot yourself in the foot edition.
“So China is now paying us billions of dollars in tariffs”
How does a tariff work? A tariff is a tax on imported goods, so if a Chinese good is sold to an American, the American literally has to pay the tax.
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Guest Contribution: “Explaining weak investment growth after the Great Recession: a macro-panel analysis”
Today, we are pleased to present a guest contribution written Ines Buono and Sara Formai (Banca d’Italia) summarizing their chapter published in the book International Macroeconomics in the wake of the Global Financial Crisis edited by L. Ferrara, I. Hernando and D. Marconi. The views expressed here are those solely of the author and do not reflect those of their respective institutions.
The Mini-Recession of 2015-16?
Neil Irwin at the NYT has an interesting article on the localized recession in 2016. One conclusion he makes:
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JP Morgan Chase: “U.S.-China endgame involving 25 percent U.S. tariffs on all Chinese goods in 2019”
That’s according to Bloomberg.
Learning from History and Modeling: Chinese Trade Retaliation Choices
An interesting symposium in the 2nd Quarter 2018 issue of Choices, published by the Agricultural and Applied Economics Association, deals with the impact of Chinese trade retaliation aimed against US agricultural exports.
And Back in Fiscal-Land
The FY2019 projected deficit balloons, as the estimated “dynamic” effects of the Tax Cuts and Jobs Act prove minor (quelle suprise!)
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Minnesota Powers Ahead, Wisconsin Flatlines
According to the Philly Fed coincident indices.
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US Tariff Levels Now at Emerging Market Levels
The following graph compares average tariff levels across countries.
One can take comfort from the fact US tariff rates are historically low.
I have two observations:
- We live in an era of global value chains, so that the value added has been chopped up and split across nations. In this context, a tariff of 10% on final value is a lot more than 10% on value added.
- This shock to global value chains comes on the back of an already stretched logistics network.
The latter point is highlighted by the following graph:
The latter is perhaps a temporary phenomenon, likely to end when the economy goes into recession. However, the former is likely more persistent.
Global value chains have been built up over decades; rejiggering these chains to accommodate tariffs of indefinite duration is sure to be disruptive, possibly inflationary (although that depends on monetary policy).