[04/07 edited to add] The first 2 are long, but if you’re willing to read them, you probably don’t need to read the rest. If you want something a little lighter, skip the first two and read the shorter takes after that.
[04/06 edited to add] This late addition is perhaps the best explainer to date. It even references the exact book where the tariff formula came from.
[04/07 edited to add] Another late edition, criticizing the argument that the Smoot-Hawley tariff act was the cause of the Great Depression.
First 3 are longest to shortest (so skip to the 3rd if you want the tl;dr). Last one is long, but added after the initial post because it’s a very good take.
I don’t claim to understand the economics of this well. But I do have a history of making pretty good guesstimates about the broad effects of messing with complex systems (and the economy is far more complex than I’ve ever heard any economist admit).
So for what it’s worth (probably not much), I suspect that the tariffs will cause the following (for the U.S.):
Significant short-term (< 1 year) turmoil (unpredictable results, including some directly-noticeable pain),
Mild mid-term (1-2 years) price increases (not inflation) with even or slightly positive job creation (from onshoring), and
Positive long-term (> 2 years) benefits.
Oh, and I expect the stock market will be suppressed for a bit (maybe a few months, until a number of countries reduce their tariffs and receive reciprocal reductions from us) and then climb back up at a slow-moderate pace.
Nobody knows anything. But we should probably allow Trump to take his best shot, because the alternative is worse (see The caveat, below).
This all assumes Congress doesn’t undercut the tariffs or other parts of Trump’s economic agenda.
Our biggest risk is that if they fail to support his economic plan fully, we’re all probably screwed. Because our economy is already headed for an iceberg, so without some quick and radical steering changes, we’re sunk.
And since we generate about a quarter of the world’s GDP, if our economy goes down, the world’s will follow.
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