2026 could see US slowdown
1h
Economists said Donald Trump's 2025 tariff increases had not yet crashed the US economy but warned their full adverse effects could materialize in 2026.
Reposted by Menzie Chinn, Antonio Fatás, Michael Kevane
Why haven’t Trump’s tariffs crashed the US economy? | Jeffrey Frankel
Why haven’t Trump’s tariffs crashed the US economy? | Jeffrey Frankel
Effects on inflation and employment have not been as bad as feared – but could still materialise with full force in 2026
www.theguardian.com
December 29, 2025 at 5:22 PM
Why haven’t Trump’s tariffs crashed the US economy? | Jeffrey Frankel
Reposted by Menzie Chinn
Tariffs did little damage to US GDP & inflation in 2025. Explanatn? 1. Govt shutdown derailed late-year stats 2. Trump backed off the most extreme tariffs 3. Importers stockpiled ahead 4. Firms absorbed higher prices, rather than passing on fully to consumers. Probably in 2026.
prosyn.org/2Rk6QVY
prosyn.org/2Rk6QVY
Why Haven’t Trump’s Tariffs Crashed the US Economy?
Jeffrey Frankel explains why a disaster deferred in 2025 may not be a disaster denied in 2026.
prosyn.org
December 29, 2025 at 10:01 PM
Tariffs did little damage to US GDP & inflation in 2025. Explanatn? 1. Govt shutdown derailed late-year stats 2. Trump backed off the most extreme tariffs 3. Importers stockpiled ahead 4. Firms absorbed higher prices, rather than passing on fully to consumers. Probably in 2026.
prosyn.org/2Rk6QVY
prosyn.org/2Rk6QVY
People ask, “If the economy is growing, why doesn’t it feel like it?” Because our individual economic realities are driven less by the national average and more by the policy choices—tariffs, taxes, and cuts—that decide who actually gets the gains from growth.
December 28, 2025 at 11:09 PM
People ask, “If the economy is growing, why doesn’t it feel like it?” Because our individual economic realities are driven less by the national average and more by the policy choices—tariffs, taxes, and cuts—that decide who actually gets the gains from growth.
by Simon Lester
"Why Haven’t Trump’s Tariffs Crashed the US Economy?"
In my view, an important part of the answer is the economic stimulus provided by very high deficit spending.
(As a matter of economic policy, this approach works until suddenly it doesn't and everyone panics.)
In my view, an important part of the answer is the economic stimulus provided by very high deficit spending.
(As a matter of economic policy, this approach works until suddenly it doesn't and everyone panics.)
US importers have so far avoided passing along the full costs of Donald Trump's tariffs onto their customers, notes Jeffrey Frankel. But they will not let tariffs eat into their profits forever. bit.ly/3YcQr4r
Why Haven’t Trump’s Tariffs Crashed the US Economy?
Jeffrey Frankel explains why a disaster deferred in 2025 may not be a disaster denied in 2026.
bit.ly
December 29, 2025 at 4:46 PM
"Why Haven’t Trump’s Tariffs Crashed the US Economy?"
In my view, an important part of the answer is the economic stimulus provided by very high deficit spending.
(As a matter of economic policy, this approach works until suddenly it doesn't and everyone panics.)
In my view, an important part of the answer is the economic stimulus provided by very high deficit spending.
(As a matter of economic policy, this approach works until suddenly it doesn't and everyone panics.)
by Prem Sikka
Influx of cheap Chinese imports could drive down UK inflation, economists say.
Stupid strategy. UK Govts deindustrialised, increased foreign dependence; cut real wages, create job insecurity and poverty.
Why not control inflation by removing cash from the rich through selective taxation?
Stupid strategy. UK Govts deindustrialised, increased foreign dependence; cut real wages, create job insecurity and poverty.
Why not control inflation by removing cash from the rich through selective taxation?
Influx of cheap Chinese imports could drive down UK inflation, economists say
As Trump’s tariffs take effect, Britain is likely alternative destination for cars, telecoms and sound equipment
www.theguardian.com
December 29, 2025 at 1:07 PM
Influx of cheap Chinese imports could drive down UK inflation, economists say.
Stupid strategy. UK Govts deindustrialised, increased foreign dependence; cut real wages, create job insecurity and poverty.
Why not control inflation by removing cash from the rich through selective taxation?
Stupid strategy. UK Govts deindustrialised, increased foreign dependence; cut real wages, create job insecurity and poverty.
Why not control inflation by removing cash from the rich through selective taxation?
Tariffs and trade policy uncertainty significantly contribute to stock market volatility. doi.org/10.1016/j.frl.2025....
December 29, 2025 at 6:45 PM
Tariffs and trade policy uncertainty significantly contribute to stock market volatility. doi.org/10.1016/j.frl.2025....
Disappointing oped... the tariffs have been really high... so why small effects? ... the tariffs haven't been so high... And, the data could be bad... So then find reliable data! And then, ... it'll happen next year.
Maybe just write: "Don't know, sorry..."
Maybe just write: "Don't know, sorry..."
Why haven’t Trump’s tariffs crashed the US economy? | Jeffrey Frankel
Why haven’t Trump’s tariffs crashed the US economy? | Jeffrey Frankel
Effects on inflation and employment have not been as bad as feared – but could still materialise with full force in 2026
www.theguardian.com
December 29, 2025 at 6:02 PM
Disappointing oped... the tariffs have been really high... so why small effects? ... the tariffs haven't been so high... And, the data could be bad... So then find reliable data! And then, ... it'll happen next year.
Maybe just write: "Don't know, sorry..."
Maybe just write: "Don't know, sorry..."
JUST PUBLISHED: "Tariffs, Inflation and Monetary Policy: Implications for Welfare" is published at the Journal of International Money and Finance: doi.org/10.1016/j.jimonfin.... Working paper version is available at dx.doi.org/10.2139/ssrn.513...
December 29, 2025 at 4:45 PM
JUST PUBLISHED: "Tariffs, Inflation and Monetary Policy: Implications for Welfare" is published at the Journal of International Money and Finance: doi.org/10.1016/j.jimonfin.... Working paper version is available at dx.doi.org/10.2139/ssrn.513...
by Simon Lester
1. Using stimulus during an economic downturn or pandemic is very different from making it a permanent policy, as is happening at the moment.
2. "Smoothing out" the economic impact of tariffs may change how different actors are affected by tariffs, but it doesn't make the problems go away.
2. "Smoothing out" the economic impact of tariffs may change how different actors are affected by tariffs, but it doesn't make the problems go away.
December 29, 2025 at 4:57 PM
1. Using stimulus during an economic downturn or pandemic is very different from making it a permanent policy, as is happening at the moment.
2. "Smoothing out" the economic impact of tariffs may change how different actors are affected by tariffs, but it doesn't make the problems go away.
2. "Smoothing out" the economic impact of tariffs may change how different actors are affected by tariffs, but it doesn't make the problems go away.
Reposted by Simon Lester
US importers have so far avoided passing along the full costs of Donald Trump's tariffs onto their customers, notes Jeffrey Frankel. But they will not let tariffs eat into their profits forever. bit.ly/3YcQr4r
Why Haven’t Trump’s Tariffs Crashed the US Economy?
Jeffrey Frankel explains why a disaster deferred in 2025 may not be a disaster denied in 2026.
bit.ly
December 29, 2025 at 3:35 PM
US importers have so far avoided passing along the full costs of Donald Trump's tariffs onto their customers, notes Jeffrey Frankel. But they will not let tariffs eat into their profits forever. bit.ly/3YcQr4r
FREE ACCESS to "Expected versus Unexpected Inflation: The Role of Trade Policy" is available at authors.elsevier.com/a/1mLt...
December 29, 2025 at 2:21 PM
FREE ACCESS to "Expected versus Unexpected Inflation: The Role of Trade Policy" is available at authors.elsevier.com/a/1mLt...
Reposted by David Darmofal, Brian Jm Quinn
Rep. Andy Biggs: "I would suspect that probably in about four months you'll see something really dramatic happen and the prices will come down ... things are going better than most people would realize, but Americans feel things."
December 29, 2025 at 7:20 PM
Rep. Andy Biggs: "I would suspect that probably in about four months you'll see something really dramatic happen and the prices will come down ... things are going better than most people would realize, but Americans feel things."
"Pass-through of shocks into different U.S. prices" is available at the Review of International Economics: doi.org/10.1111/roie.12726
December 29, 2025 at 12:15 PM
"Pass-through of shocks into different U.S. prices" is available at the Review of International Economics: doi.org/10.1111/roie.12726
Remember when we were discussing it 2 years ago?!
A year ago, it wasn’t clear whether Project 2025 would amount to much. Today, it’s become the Trump era’s most effective policy initiative. In The Atlantic Daily, @dgraham.bsky.social reviews how Project 2025 transformed 2025:
The Plan That Foretold Trump’s 2025
Reviewing Project 2025’s year of successes and shortcomings
bit.ly
December 29, 2025 at 10:03 PM
Remember when we were discussing it 2 years ago?!
by John McLaren
We test this with data on tariffs from the 1990's (the time of the last multilateral tariff reset) and the 2018-9 trade war. Generally, there is a strong correlation between the fraction of an industry located in swing states ('swingness') and the tariff it receives. (3/6)
December 28, 2025 at 10:30 PM
We test this with data on tariffs from the 1990's (the time of the last multilateral tariff reset) and the 2018-9 trade war. Generally, there is a strong correlation between the fraction of an industry located in swing states ('swingness') and the tariff it receives. (3/6)
"Pass-through of Trade Costs to U.S. Import Prices" is available at the Review of World Economics: doi.org/10.1007/s10290-015-...
December 29, 2025 at 7:45 AM
"Pass-through of Trade Costs to U.S. Import Prices" is available at the Review of World Economics: doi.org/10.1007/s10290-015-...