Marketplace Morning Report Why people see tariff-induced inflation differently
Oct 27, 2025
Joining the discussion is Alex Imas, an economist from the University of Chicago and a behavioral economics expert. He reveals intriguing insights into how consumers react differently to inflation caused by tariffs compared to other types. Imas explains that feelings of national superiority and strategic messaging can influence acceptance of price hikes. He also warns that perceived corporate greed can undermine support for tariffs, transforming public sentiment. Their conversation provides a fresh look at the psychology behind economic perceptions.
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U.S. Rare-Earths Processing Example
- Eclair Resources will open a U.S. ionic clay separation facility to produce dysprosium and terbium oxides by 2028.
- The move aims to build a rare-earths supply chain less dependent on China for critical magnets used in EVs and defense.
Tariffs Carry A Political Signal
- Tariff-driven price rises are perceived differently because tariffs are a visible policy choice, not an anonymous market shock.
- People tolerate some tariff inflation if they believe it advances national goals or penalizes foreign competitors.
Superiority Shapes Consumer Acceptance
- People seek superiority by consuming goods others can't access, which makes them more willing to bear tariff costs.
- That superiority-seeking attitude helps explain why tariff inflation can be more acceptable than other inflation types.
