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EC SD | Nope - tariffs are not inflationary if all else is equal.
Majority of US consumers spend their whole paycheck each month on something. If TVs get more expensive for the next year, they will avoid upgrading their TV. If French wine/cheese gets too pricey, they will buy CA wine and WI cheese. Consumers are smart and will normally buy the cheaper offerings. Now if they have to buy that imported TV regardless, then that excess expense means they will not be buying as much other goods that month. This backoff of spending on "other" goods means those "other" goods may go on sale to clear out the excess inventory. That lowering of price on some "other" items will offset the higher price on the TV.
It nets out to zero inflationary effect. | |
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Trump Tariffs = Biden’s “IRA” = Inflation.
