WSJ What’s News Why Has the Tariff Effect Been So Mild?
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Aug 6, 2025 President Trump's tariffs have surprisingly had minor effects on the economy, leaving store shelves well-stocked and inflation only gradually rising. The podcast dives into the reasons behind this muted impact. It also highlights a major shift in the auto industry as American carmakers pivot back to gas-guzzling vehicles, despite an ongoing commitment to electric innovation. Additionally, updates on current events include allegations at UCLA and reliability concerns with recent economic data, adding context to the ongoing discussion.
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Mild Economic Impact of Tariffs
- Tariffs have caused only a modest increase in inflation and minimal supply disruptions so far.
- US companies are absorbing tariff costs, delaying price hikes to consumers.
Companies Absorb Tariffs Temporarily
- Many US companies absorb tariff costs to avoid losing customers by raising prices.
- Eventually, companies will likely pass tariff costs to consumers, causing moderate inflation rise.
Shift Back to Gas-Powered Vehicles
- The Trump administration's rollback of EV regulations lets automakers invest more in profitable gas-powered trucks.
- Automakers balance EV production and gas vehicles to meet US and global market demands.