It is too soon to hold a funeral for US tariffs

{"text":[[{"start":7.02,"text":"Bad news if you’re planning a riverine funeral procession in Maine. Last week Donald Trump, in a last-ditch attempt to save the state’s Senate seat for Republican Susan Collins in next week’s midterm elections, removed import tariffs from industrial inputs including paper, plywood and certain machinery and imposed them on canoes and coffins instead."}],[{"start":30.64,"text":"Collins, whose support for Trump’s agenda has made her moderate Republican act increasingly risible, has already drawn deserved ridicule for boasting she had got Trump to exempt road salt from import duties. “We can’t eat road salt,” her Democratic challenger scoffed."}],[{"start":47.16,"text":"Targeted tariff relief seems unlikely to save the Republicans many votes. Most voters do not import plywood, let alone eat it, and the cuts are way too small to affect general inflation. Yet while tariffs are clearly unpopular, they are as much a convenient peg on which voters can hang general discontent with the cost of living and Trump himself as a significant direct contributor to higher consumer prices."}],[{"start":72.96,"text":"The midterms will be largely about Trump, because he’s personally assured everyone that they will, and his trade policy will be on trial given how much power he has unconstitutionally arrogated from a supine Republican Congress. A Democratic victory will not only change what Congress does with trade policy but whether it tries to have any say at all."}],[{"start":93.68,"text":"Tariffs are a staple attack line in Democrats’ campaign commercials: Republicans prefer to pretend the issue does not exist. Some polling evidence suggests the levies have become more unpopular over the past year. But the substantive relationship between the actual impact of Trump’s tariffs and election voting is tenuous. Some of those most directly affected by the tariff wars — farmers, for instance — have continued to vote for him."}],[{"start":118.44,"text":"The latest estimates from The Budget Lab at Yale University suggest that the medium-run effect of tariffs on overall consumer prices will be a less than cataclysmic 0.7 per cent after taking account of consumers switching to cheaper goods. The cost of tariffs relative to median household post-tax income will be the same moderate 0.7 per cent."}],[{"start":140.12,"text":"The Budget Lab says tariffs have pushed up prices in some categories sharply, including autos by 2.8 per cent and clothes and shoes by 3.3 per cent. But with a few exceptions, grocery prices — of very high salience for voters — have been much less affected, the tariffs increasing food costs by just 0.7 per cent. Trump is correctly blamed for his Iran misadventure pushing up fuel prices, but the relationship between tariffs and consumer inflation is weaker."}],[{"start":null,"text":"

"}],[{"start":169.54,"text":"Still, Trump’s predecessor Joe Biden discovered that presidents get the blame for inflation whether fairly or not. The notorious surge in egg prices after 2022 had almost nothing to do with Biden’s fiscal policy: it was principally a supply shock from avian flu. But correlation was taken as causation and Trump’s ovular attacks on Biden landed hard."}],[{"start":191.94,"text":"The evidence shows that the public also thinks “inflation” is a persistently elevated level of prices rather than the current rate of change, the correct economists’ definition. Trump’s reckless promise to reverse rather than just slow or stop the increase in grocery prices set him up for failure."}],[{"start":208.54,"text":"There’s a tendency to project the impact of specific issues such as trade on to elections while ignoring more important factors. The Midwestern state of Ohio provides a particularly neat example. In 2006, Democrat Sherrod Brown was elected as senator. Brown strongly opposed trade agreements, including those pushed by then president George W Bush. But by that point, Bush was deeply unpopular for other reasons, notably the Iraq war. This surely had a lot to do with Brown’s victory."}],[{"start":237.96,"text":"Four years later, unhappy with the sluggish economy after Barack Obama’s first two years as president, the people of Ohio voted in Republican Rob Portman, formerly Bush’s US trade representative, who had pushed for the very deals Brown attacked. Indeed, Portman defended trade for creating employment through exports and criticised his Democratic opponent for blaming it for job losses."}],[{"start":259.9,"text":"Tariffs will undoubtedly cost the Republicans a lot of votes next week, deservedly so. Trump’s experiment clearly hasn’t worked. But part of the unpopularity of tariffs comes from their close association with a president deeply disliked by some. We cannot yet hold a funeral for high tariffs in US trade policy, especially with the prices of coffins as elevated as they are."}],[{"start":285.87,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793279158_2574.mp3"}