The Trump administration can declare a minor victory in the trade war.
It is not yet a victory over China. It’s a victory over the Federal Reserve.
A trio of economists from the Federal Reserve Bank of New York have posted an article on the bank’s blog, Liberty Street Economics, that challenges the claim that U.S. households are paying for tariffs on Chinese imports.
Five months ago, Liberty Street Economics wrote about a controversial study that claimed to show the tariffs were costing American households hundreds of dollars a year in the form of higher prices for imported goods. That study was at odds, however, with data on consumer prices, which have down no evidence of price hikes due to tariffs.
The key flaw in the earlier study was that it assumed that the fact that import prices were not falling to offset the higher import duties meant that the duties must be passed on to U.S. consumers. Breitbart News pointed out that this was a wrong-headed reading of the data on import prices.
https://www.breitbart.com/economy/2019/11/25/carney-fed-economists-finally-admit-tariff-may-not-squeeze-u-s-consumers/
Well, well.
Seems all those naysayers trumpeting tariffs are so bad for us and we are paying a lot more for commodities were just throwing stuff on the wall to see if it would stick.
