General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsFed researchers say tariffs actually lower inflation -- because they're demand shocks that slam employment and economy
https://fortune.com/2025/11/15/tariffs-inflation-demand-shock-unemployment-economic-activity/The inflation response goes against the predictions of standard models, whereby CPI inflation should go up in response to higher tariffs, they wrote. Instead, tariff shocks appear to act as aggregate demand shocksmoving inflation and unemployment in the same directions.
One possible explanation is that tariffs create uncertainty that hits consumers and investors confidence, depressing economic activity and putting downward pressure on inflation, according to the study.
Alternatively, tariffs could trigger a drop in asset prices that also weigh on demand, resulting in higher unemployment and lower inflation.
MarineCombatEngineer
(16,912 posts)Does anyone understand this garbage?
B.See
(7,332 posts)reich wing talking points, spin, and bullshit trickle down batshitery.
Sort of like arguing how mass deaths from Covid "culled the populace and strengthened 'herd immunity.'"
MarineCombatEngineer
(16,912 posts)if you can't dazzle them with brilliance, then baffle them with bullshit.
Autumn
(48,658 posts)NickB79
(20,164 posts)This study is saying that lower inflation only comes from a cratering economy.
Autumn
(48,658 posts)They can tell me the sky is blue and I will 100 % believe it isn't. Until I hear it from someone that I trust I'm going to say bullshit.
Stacey Grove
(116 posts)You did not submit your post in proper "RAH RAH RAH SIS BOOM BAH" Us vs. Them format.
B.See
(7,332 posts)their own firmly planted HEADS.
JI7
(92,980 posts)and lead to recession.
Autumn
(48,658 posts)Last edited Mon Nov 17, 2025, 12:10 PM - Edit history (1)
There is always an angle for the Con and his crew.
BOSSHOG
(44,161 posts)Put a smile on Melanias face in the summer time.
Tariffs are self-defeating.
Its also illegal for a president to impose tariffs. That is Congress job.
Trump is a criminal.
Silent Type
(12,022 posts)at the cost of all that other chit like unemployment.
surfered
(10,339 posts)Youll have real price decreases with a depression.
Silent Type
(12,022 posts)Jack Valentino
(4,049 posts)OK.....
FHRRK
(1,314 posts)Quit after 1st paragraph
A new study that examined 150 years of tariffs in the U.S. and abroad found they disrupt the economy and financial markets so much that the result is lower inflation.
Of those studied, how many were all encompassing? That is all products from all Countries. That is a HUGE difference from targeted tariffs on certain products. It also is not very representative due to changes in global economics.
For example what does a tariff in the early 1900s on lumber effectively tell us about current tariffs on Canada. Im sure in 1910 we could easily meet all lumber needs by clear cutting in the Pacific Northwest and Great Lakes region. Canadian lumber would likely put a downward pressure on US lumber, thus lower costs because many tariffs were protectionary.
So what happened 100 years ago, on specific items is a great deal different than across the board tariffs today.
I bet the majority of people had limiting understanding of Supply Chain prior to COVID. I actually have a Degree in Supply Chain from 40 years ago, I think there was three colleges that had a Supply Chain program in the 1980s.
Hell we didnt have an interstate Hwy system until well into the 1960s so manufacturing was regional with almost all goods required coming from the same region. Economic air shipments of goods was in the 1970s and 80s, (and usually required mgmt signoff) Effective and timely communications across Oceans, the 90s and 2000s. (Realistically not until about 2005)
Comparing the 1920s to 2020s is ignoring so many factors. Would be akin to comparing my Grandmothers opportunities (born in late 1890s) to my daughters opportunities. (born in 1990s)
genxlib
(6,038 posts)Anything that slows down the economy and curtails spending slows down inflation
It is akin to using higher interest rates to slow inflation because it slows investment, and borrowed spending. But the Fed does that strategically whereas this is just an unintended consequence of an erratic and dumb policy
genxlib
(6,038 posts)Anything that slows down the economy and curtails spending slows down inflation
It is akin to using higher interest rates to slow inflation because it slows investment, and borrowed spending. But the Fed does that strategically whereas this is just an unintended consequence of an erratic and dumb policy
ProfessorGAC
(75,248 posts)But, it's not painting a rosy picture economically.
That's the part I agree with.
It causes contraction which, of course, is bad.
It causes unemployment due to lower demand. Also bad.
The lid it puts on inflation is completely logical. But, that doesn't make it a positive.
The leverage tariffs have on inflation is a secondary outcome & not a good reason to apply them, especially as broadly & chaotically as they've been applied this time.
Surgically applied, narrow tariffs have had some positive effects. Carpet bombing the world economy with tariffs, not so much.