[[link removed]]

YOUR LIFE WILL NEVER BE THE SAME AFTER THESE TARIFFS  
[[link removed]]


 

Justin Wolfers
April 4, 2025
New York Times
[[link removed]]


*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

_ Small tariffs create small problems. Big tariffs create huge ones.
this round of tariffs may be 50 times as painful as the ones Donald
Trump instituted in his first term. That means they are going to
reshape your life in much more fundamental ways. _

,

 

These tariffs are going to hurt. A lot. By my calculations, this round
of tariffs may be 50 times as painful as the ones Donald Trump
instituted in his first term. That means they are going to reshape
your life in much more fundamental ways.

To illustrate how, let’s look at a prosaic example: your washing
machine. In 2018, Mr. Trump’s relatively modest tariffs caused
washing machine prices to rise by nearly $100. As a result, many
families elected to stick with their aging machines longer than they
otherwise would have. But that choice incurred a new set of costs:
late-night thuds from unbalanced loads, wads of scrunched cloth still
dripping wet after a cycle and higher energy and water bills.

In other words, the total cost of a tariff isn’t just what comes out
of your checking account. The time you spend to rearrange the stuff in
your washer is a cost. The time you spend wringing out sopping wet
T-shirts is a cost. Tariffs are costly not just because they raise
prices but because they force you to make different decisions that
will extract a different kind of cost from you over time.

Small tariffs create small problems. Big tariffs create huge ones.
Take Mr. Trump’s 25 percent tariff on vehicles, which is expected to
raise their prices by roughly
[[link removed]] $4,000
[[link removed]].
Many families, like mine, will probably decide not to buy a second
car. That creates far bigger problems than an aging washer. Now,
we’re constantly juggling how to get our kids to all their
activities, and ourselves to work, with only one set of wheels.

And it’s not just cars. These are across-the-board tariffs, so they
will distort virtually every purchase you make. In each case you’ll
have to stop your baked-in calculations, recalibrate and find a way to
make do — perhaps substituting frozen vegetables for fresh
vegetables, a less effective medication for a higher-priced import, or
corn syrup for sugar. And in each case, you’re worse off.

By the way, tariffs don’t distort just your buying decisions, they
also distort what businesses make. Just as tariffs lead you to buy
less desirable alternatives, they lead businesses to channel labor and
capital into less desirable — that is, less productive —
activities.

The tariffs announced on Wednesday are roughly 10 times as high
[[link removed]] as those of
most other industrialized countries, and higher than the infamous
Smoot-Hawley tariffs (of Great Depression fame).

Mr. Trump’s latest tariffs will lead folks to rethink not only
whether to replace their washing machines — as they did in 2018 —
but also their dryers, refrigerators, stoves, groceries, clothes, cars
and even everyday essentials.

Many of the substitutions we’ll make will be quite painful. If a 1
percent tariff leads you to switch from real guacamole to a pea-based
alternative
[[link removed]],
then you really didn’t care about guac all that much. But if it
takes a 20 percent tariff to get you to switch, that’s a sure sign
that going without the real thing is a serious hardship. And this is
why higher tariffs generate a far greater amount of pain. These forces
aren’t independent of each other. They interact. Or in math, they
multiply, which means their costs rise in the square of the tariff
rate. That leads to some pretty painful arithmetic.

The average tariff rate was about 1.5 percent just before Mr.
Trump’s election in 2016. He subsequently raised tariffs on steel,
aluminum, washing machines, solar panels and many goods from China,
but left much of the rest of the economy untouched. All told, by 2019
he roughly doubled the tariff rate, to around 3 percent — and so
effectively quadrupled whatever pain the 2016 tariffs were causing.
(Yes, two times two is four.)

Joe Biden kept some of these tariffs, but Mr. Trump’s latest round
pushes our current rate to around 15 times its 2016 level, and so
squaring that, it’s 225 times more painful. That’s more than 50
times as large as the cost of Mr. Trump’s first-term tariff
increase.

Perhaps voters pulled the lever for Mr. Trump with warm memories of
the good economic times. But the reality of his first term is that
there was a lot more tariff talk than action
[[link removed]].
They were barely more than a bump in the road. This time, they’re a
mountain. And so the impact will be more like a crash than last
time’s comfortable jolt.

Justin Wolfers is a professor of economics and public policy at the
University of Michigan.

Get the best of the New York Times
[[link removed]] in your Inbox with a free
newsletter. Gain unlimited access to all of The Times with a digital
subscription [[link removed]].

* Donald Trump
[[link removed]]
* Tariffs
[[link removed]]
* Income Inequality
[[link removed]]
* taxes
[[link removed]]

*
[[link removed]]
*
[[link removed]]
*
*
[[link removed]]

 

 

 

INTERPRET THE WORLD AND CHANGE IT

 

 

Submit via web
[[link removed]]

Submit via email
Frequently asked questions
[[link removed]]
Manage subscription
[[link removed]]
Visit xxxxxx.org
[[link removed]]

Twitter [[link removed]]

Facebook [[link removed]]

 




[link removed]

To unsubscribe, click the following link:
[link removed]