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https://www.thebulwark.com/p/trump-tariff-pain-knocking-at-your-door
Right now, the U.S. economy has a lot in common with Wile E. Coyote.
Like the hapless Looney Tunes predator, Donald Trump’s economy went charging off a cliff after his April 2 “Liberation Day” tariffs, which—despite endless tweaks, revisions, abrupt extensions, and equally abrupt reversals—are gradually settling into a new status quo in which the costs of global trade are far higher than before.
But we’re just starting to feel the true impact of that status quo. Because until recently, a series of ameliorating factors have kept things looking artificially normal.
Trump’s sudden about-face on the most psychotic tariff rates reassured markets that he wouldn’t simply melt the economy down to slag on a whim. Instead, he introduced traders to the TACO model and gave them an object lesson in the pleasures of buying the dip. Monthly jobs reports kept coming in strong, seeming to complicate expectations that tariffs would force companies to be more aggressive managing their payroll. And consumer prices continued to rise relatively slowly, making Trump’s insistence that companies would simply “eat” the cost of the tariffs look facially plausible.
But much of this now appears to have been a mirage. The latest jobs report found that earlier estimates of strong job growth post-April 2 had been incorrect; hiring has slowed dramatically under our new tariff regime. And the temporary lifelines that had been holding consumer prices at reasonable levels are quickly vanishing too: Companies that stampeded to import as much as they could before tariffs took effect are burning through that pre-tariff inventory.
Right now, the U.S. economy has a lot in common with Wile E. Coyote.
Like the hapless Looney Tunes predator, Donald Trump’s economy went charging off a cliff after his April 2 “Liberation Day” tariffs, which—despite endless tweaks, revisions, abrupt extensions, and equally abrupt reversals—are gradually settling into a new status quo in which the costs of global trade are far higher than before.
But we’re just starting to feel the true impact of that status quo. Because until recently, a series of ameliorating factors have kept things looking artificially normal.
Trump’s sudden about-face on the most psychotic tariff rates reassured markets that he wouldn’t simply melt the economy down to slag on a whim. Instead, he introduced traders to the TACO model and gave them an object lesson in the pleasures of buying the dip. Monthly jobs reports kept coming in strong, seeming to complicate expectations that tariffs would force companies to be more aggressive managing their payroll. And consumer prices continued to rise relatively slowly, making Trump’s insistence that companies would simply “eat” the cost of the tariffs look facially plausible.
But much of this now appears to have been a mirage. The latest jobs report found that earlier estimates of strong job growth post-April 2 had been incorrect; hiring has slowed dramatically under our new tariff regime. And the temporary lifelines that had been holding consumer prices at reasonable levels are quickly vanishing too: Companies that stampeded to import as much as they could before tariffs took effect are burning through that pre-tariff inventory.
