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It’s been a year since the Trump administration announced new tariffs on imported steel and aluminum. Despite the claim from economists with Ivy League pedigrees that U.S. consumers must be paying tariffs, consumer price data show that prices are not rising very much at all.
The Department of Labor’s consumer price index was up just 1.5 percent in January compared with a year ago. That’s actually a slowdown in inflation compared with the prior months even though the Trump administration imposed a 10 percent tariff on $200 billion of Chinese imports in October and announced its steel and aluminum tariffs in March 2018.
Food - Energy - Picture - Core - Inflation
Excluding volatile food and energy doesn’t change the picture very much because core inflation was also very low. Core CPI climbed just 0.1 percent for the month, less than it had in the prior three months, and is up just 2.1 percent from a year ago. That is in-line with the January, December and November’s 2.2 percent, October’s 2.1 percent, and September’s 2.2 percent 12-month increases. The Federal Reserve says it targets inflation of 2 percent.
Car and truck prices are perhaps the most important consumer item that tariff opponents claimed would be pushed up by the metals tariffs. But these have hardly moved. Prices of new cars fell 0.3 percent in February. Compared with a year ago, car prices are up just 0.6 percent. The price of new trucks fell 0.1 percent in January. Compared with a year ago, truck prices are up 0.2 percent.
Tariffs - Taxes - Consumers - Prices - Prices
If tariffs were acting as taxes on consumers, prices would be higher. At the very least, prices on items subject to tariffs would be higher. But instead, we’ve seen month after month of very muted inflation.
Prices of most items subject to the metals and China tariffs have either declined or advanced on pace with or...
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