Weekly Updates
Weekly Updates
- US President Trump has retreated from four tariff threats. Taxes on imports from Colombia, Mexico, and Canada have disappeared or are on hold. Similarly, goods worth less than USD 800 stay tariff free for now.
- Taxing the price of a cup of Colombian cold brew would be visible and immediate. Taxing imports from Mexico could provoke open rebellion from Gen Z, contemplating higher prices for avocado on toast. US fuel suppliers have already emailed clients about higher propane prices if Canadian imports are taxed. Ending low-cost tariff exemptions would mean US shoppers on websites like Temu would swiftly realize that tariffs mean higher prices, paid by consumers. Such visible tariffs tend not to last.
- Tariffs on bulk purchases from China are less visible. Careful rerouting by China allows US customers to avoid paying taxes. China’s exports also tend to fall in price over time; a tariff that slows deflation is less visible than one that accelerates inflation.
- Similarly, few US households buy ingots of aluminium. They do buy beer—but a 25% tariff on aluminium increases the price of a sixpack less than 1.5 cents. Even rounded up to 5 cents (if the production of pennies ceases), the price effect is less visible. Less visible tariffs are more likely to endure.
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