Bloomberg Surveillance Single Best Idea with Tom Keene: Glenn Hubbard & Frances Donald
Jul 17, 2025
Business innovation takes center stage, showcasing how technology transforms growth strategies, especially in healthcare. The discussion shifts to tariffs, dissecting their role as hidden taxes affecting supply chains and economic stability. Listeners will find insights into the balance of imports and exports, challenging common beliefs about the relationship between tariffs and inflation. The episode also peels back layers on who truly bears the burden of tariffs, whether it's producers or consumers, unraveling a complex economic debate.
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Tariffs Are Supply Chain Distortions
- Tariffs function as a tax that mostly causes one-time price level changes, not ongoing inflation.
- They distort supply chains and harm manufacturing by taxing imports, which effectively also taxes exports due to currency movements and intermediate goods nature.
Tariff Impact Delayed And Absorbed
- The full economic impact of tariffs may not be visible until late 2026 due to high inventory levels from front-loading.
- Most tariff costs may be absorbed by businesses as margin compression rather than passed directly to consumers.