“Overall, the producer price index (PPI), which measures the prices paid to domestic producers for their output, climbed by 0.9 percent last month (well above expectations) and 3.3 percent on an annualized basis. A few categories saw particularly large increases. Wholesale prices for food, for example, rose by 1.4 percent, while wholesale prices for consumer electronics increased by over 3 percent.
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Lots of domestic products rely on imports of raw materials and intermediate goods. You can’t make a chocolate bar without cocoa beans, for example, and over half of all imports are things that domestic businesses use as inputs.
Economists have warned that tariffs would increase the cost of importing component parts and force domestic firms to increase the prices they charge for their outputs. That seems to be exactly what today’s PPI report shows.
Second, the PPI is often seen as an advance warning system for higher inflation at the consumer level—because higher prices at the wholesale level will likely be passed along at the retail level.”
“Even as some Republicans mocked economists for predicting prices would rise as a result of tariffs, there was a whistling-past-the-graveyard quality to the snickering. Yes, tariffs that had been threatened, delayed, and only partially implemented hadn’t yet much increased costs for consumers, but there were clear signs that importers were rushing to beat high customs duties, and that trouble was on the way. Now we’ve had a weak jobs report and a higher-than-expected producer price index (PPI), and it’s clear that tariffs perform just as we were warned: They raise prices for domestic businesses and consumers.”
“The Trump administration’s 50 percent tariffs on imported steel and aluminum were expanded this week to cover hundreds of imports that plainly are not steel or aluminum. Among the items targeted by the new tariffs: dairy products like milk and cream, as well as gasoline and other fuels, fire extinguishers, baby strollers, furniture, engines, and motorcycles. In short, anything that contains steel or aluminum or that is (as with dairy products) transported or stored in steel or aluminum containers could now be subject to those massive import taxes.”
Trump’s Federal police action in DC is costing one million dollars a day.
Right wing media uses a deadly car accident where an illegal immigrant with a driver’s license made a driving mistake and people died…as evidence of illegals killing people. JD Vance refers to this deadly car accident as murder.
“The world’s supply of chocolate depends on the global trade of cocoa beans, which are grown exclusively in equatorial climates across Latin America, Africa, and Asia. The United States produces more chocolate than any other country in the world, but there would be no American chocolate-making businesses, large or small, without imports.
A lot of American manufacturing is like that too: U.S.-based businesses rely on imported raw materials when making everything from candy bars to new cars. Policies that make those inputs more expensive or difficult to obtain—policies such as the Trump administration’s tariffs—are leaving a bitter taste.
Chocolatiers, in particular, say trade barriers are a recipe for higher prices, lower quality, less innovation, and smaller profits. Doesn’t sound very sweet, does it?”
“President Donald Trump and his allies have spent months promising that higher tariffs will usher in a “golden age” of wealth and prosperity for America.
Now, the administration and one of its biggest allies in Congress are pushing for a new round of stimulus checks seemingly aimed at easing the economic pain caused by…yes, those same tariff policies.
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The proposal to send out tariff-funded stimulus checks should at least put an end to two of the more nonsensical claims that the president and his pro-tariff allies have been making. First, this should confirm that Americans—not foreign governments or corporations—are footing the bill for the tariffs.
Second, the idea that tariffs can be used to close the budget deficit should be similarly put to bed. Some estimates suggest that tariffs are likely to widen the deficit (even without any stimulus checks being mailed out), as they will slow economic growth and reduce future tax revenue. Even if you ignore those dynamic projections, there’s a big problem: The $150 billion in tariff revenue collected so far this year can’t be used to pay down the budget deficit if it is first going to be redistributed to Americans in the form of rebate checks.
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If Trump and Hawley want to spare Americans the pain caused by tariffs, there is a much simpler solution here: Get rid of the tariffs.”
“Inflation accelerated again last month with global trade turmoil exacting a toll on consumer prices.
The Consumer Price Index rose 2.7% over the prior year in July, and 0.2% from June.
Airfares, used cars, and shelter costs all marched higher, while food prices held fairly steady. (Except for coffee — the morning staple continues to see steep price hikes.)”
“All taxes are paid by someone, and President Donald Trump’s tariffs are no exception to that rule. The question of who pays and in what amounts is likely to become even more of a focal point in the coming days and weeks, as the White House follows through on its threat to hit imports from dozens of countries with higher tariffs starting on August 1.
Economic data from the past few months, during which the Trump administration hiked tariffs on goods from Mexico, Canada, China, and elsewhere, provide a preview of what’s to come after the August 1 tariffs hit: Higher prices for Americans.
That is, of course, what economists say tariffs do. Raising prices is really the only function of a tariff—which artificially inflates the price of imported goods to make them less attractive than domestic alternatives. Economists will also tell you that’s not the whole story. They say that domestic producers often raise prices as well, since imported competing goods are now more expensive. They also say that tariffs on raw materials and intermediate parts—like the Trump administration’s levies on steel, aluminum, and the parts necessary to build a car—will push up the cost of building other, more complex goods, and those higher costs will be passed along to consumers in the form of higher prices.
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There have been “relatively quick price responses to tariff announcements,” report a group of economists connected to the Harvard Business School’s Pricing Lab, which tracks prices throughout the economy. In a paper updated earlier this month, the Harvard economists report that there’s been a “cumulative increase in imported goods prices since early March” of approximately 3 percent. The paper relies on data from four major U.S. retail chains.
Their data show that prices for both imported and domestic goods have climbed since Trump took office, with foreign-made goods increasing more quickly thanks to two noticeable leaps that occurred right after Trump’s tariff announcements in early March and early April.
The supply of eggs only dropped a little bit, yet, the cost of eggs and the profits of big egg producing companies grew a lot. They took advantage of the situation to tell a story about an egg shortage, and made it more expensive for people to eat eggs.