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Old 05-02-2018, 07:51 PM
 
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Quote:
Originally Posted by HappyRider View Post
That's not a given. What if the supplier eats the tariffs? We're not talking mom and pop steel mill. We're talking China.They can afford it. So much of the discussion is tainted with politics today that you're never sure you're hearing the straight story. I can guarantee that anti-tariff folks are also anti-Trump.
Really? We can bring this argument up for all business taxes and yet we are constantly told that taxes are always passed down to consumers in the form of higher prices. You've probably said the same yourself. Why would this be any different? Because the tariffs are Trump's plan?
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Old 05-02-2018, 08:34 PM
 
820 posts, read 275,665 times
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Depends on what you mean by 'inflation'.
If you mean PRICE inflation, then yes, to the degree that the elasticity of demand allows.
If you mean MONETARY inflation, then no, as the total money supply has not been increased.
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Old 05-03-2018, 06:33 AM
 
Location: Copenhagen, Denmark
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It depends on the comparative advantage of the goods that are burdened and the size of the domestic demand for these goods as a whole. Or more simply, if an imported product is much cheaper to import than the domestically produced version and domestic demand for the good is high, yes a tariff on the imported will result in price increases, and this can influence the general rate of inflation depending on the price of the good and how large a share of consumption it constitutes.

Last edited by Frihed89; 05-03-2018 at 06:52 AM..
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Old 05-03-2018, 07:03 AM
 
Location: Paranoid State
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I agree with the OP. A tariff on steel may raise the price of steel, but it does not cause inflation.

It may cause a change in the quantity demanded of steel, and it may cause a change in the quantity demanded of substitutes for steel. It may cause a change in the quantity demanded of complements for steel.

But those things are not inflationary.
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Old 05-03-2018, 07:08 AM
 
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By reducing the number of US Dollars going overseas, it would cause inflation in the US.
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Old 05-03-2018, 07:13 AM
 
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In the Bahamas the government levies a $10 per imperial gallon plus 10% of cost tariff on imported beer which works out to roughly $1 per 12 oz can or bottle. The local brewers just add an equal amount to the beers they brew and sell locally to stay on par with the inflated price of imported beer. Because of this, beer sold anywhere in the Bahamas costs more than the same Bahamian beer does in Florida where there is no tariff. My vote is yes, tariffs are inflationary.
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Old 05-03-2018, 04:15 PM
 
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Quote:
Originally Posted by PamelaIamela View Post
Depends on what you mean by 'inflation'.
If you mean PRICE inflation, then yes, to the degree that the elasticity of demand allows.
If you mean MONETARY inflation, then no, as the total money supply has not been increased.
I agree. Taxes are a way to reduce inflation by removing money from the general circulation. A tariff is simply a focused tax.
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Old 05-05-2018, 12:41 PM
 
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A tariff is a one-off event. Once it's levied, the price adjusts and the price will fluctuate from that point depending on demand, substitution, currency exchange rates, etc. The BLS can remove the increase in its intervention analysis. What's inflationary is that the two or more sides in the dispute start to engage in competitive tariffs as negotiating ploy. A tariff is not necessarily inflationary, but tariffs are probably inflationary if they stick.
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Old 05-06-2018, 04:47 PM
 
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Yes these costs will be passed on to the consumer over time. Especially if there are no other foreign or domestic alternatives.
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Old 05-06-2018, 08:18 PM
Status: "My eyes are rolled back so far I can see my brain." (set 12 days ago)
 
Location: Here.
13,387 posts, read 11,879,321 times
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We had high tariffs from 1789 till about 1950. How was inflation during that time period?

https://www.google.com/search?q=hist...28XvKFT-8HHQM:

Other than the wars (1812, Civil, I and II), low or negative inflation.

Last edited by Retroit; 05-06-2018 at 08:34 PM..
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