The Indicator from Planet Money
How Trump's tariffs plan might work
Dec 2, 2024
Kyla Scanlon, an economic commentator and author of *In This Economy*, shares her insights on President-elect Trump’s ambitious tariff plans. She explores how these tariffs could reshape the economy and whether they will genuinely lower the U.S. trade deficit or just lead to higher prices for everyday goods. The conversation dives into the impact on consumer costs, particularly for popular items like chocolate chip cookies, and raises concerns about the potential job creation in the tech sector amidst economic skepticism.
09:21
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Quick takeaways
- The implementation of tariffs could significantly increase consumer prices on imported goods, leading to widespread inflation and economic concern.
- While aimed at boosting domestic production, tariffs may paradoxically harm American businesses by raising costs and reducing competitiveness in both local and global markets.
Deep dives
The Impact of Tariffs on Consumer Prices
Tariffs are essentially taxes on imported goods, and their implementation could significantly increase the prices of everyday items, including products that contain foreign ingredients. For example, cookies made with imported vanilla extract and cocoa beans would likely become more expensive under proposed tariffs from President-elect Trump. Economists generally agree that when tariffs are imposed on imports, the costs are often passed down to consumers, leading to higher prices and potential inflation. As many common goods depend on globally sourced materials, the economic repercussions are predicted to affect a wide array of products well beyond just cookies.
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