Tariffs: Making the U.S. Exceptional, but Not in a Good Way (Ben Inker and John Pease)

Citations · 6

• “corporations are likely to invest less than they otherwise would... when corporations are less confident in the return on existing investments, they're more likely to turn down new ones.”

  p#6 · confidence 95%

• “we estimate that the U.S. dollar should appreciate by roughly one third of the tariff (e.g., 8% for a 25% tariff) versus a trade-weighted basket.”

  p#18 · confidence 95%

• “in the short-term we should expect consumers to absorb about 80% of the tariff (through price increases) and producers to absorb the rest, leading to both lower sales and lower profit margins.”

  p#28 · confidence 95%

• “In an oligopolistic market... a dent to those profits does not engender any exits from the industry... it is almost certainly going to face a prolonged hit to its bottom line.”

  p#30 · confidence 93%

• “Today's spreads are tight. This is especially true of U.S. high yield, where spreads are trading at the 15th percentile... At current spreads (or anything close to them), our advice is simple: avoid U.S. high yield credit.”

  p#37 · confidence 94%

• “Under broad 25% tariffs, we should expect extreme shocks to the GDP of Canada and Mexico (5% and 7%, respectively). We should also expect a very unpleasant jolt to the U.S. economy (of over 2% of GDP)”

  p#23 · confidence 95%