The David Lin Report

Trump Raises China Tariffs To 245%: What Will Retaliation Look Like? | Thomas Hoenig

Apr 24, 2025
Thomas Hoenig, former president of the Kansas City Fed and a senior fellow at the Mercatus Center, dives into the escalating U.S.-China trade tensions and a drastic 245% tariff increase on Chinese imports. He warns that while the current economy shows strength, the trade war could lead to significant disruptions by late 2025. The discussion highlights China's potential retaliatory actions, the implications for global supply chains, and concerns about the Federal Reserve's independence amid political influences.
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INSIGHT

Consumer Rush Ahead of Tariffs

  • Retail sales rose sharply due to consumers rushing to buy before auto tariffs increase.
  • This does not indicate strong economy but uncertainty about future tariffs and trade policies.
INSIGHT

Tariffs Add Inflation Pressure

  • Inflation is already above the 2% target and tariffs will further raise prices.
  • Monetary policy response will shape whether inflation remains high beyond tariff impacts.
INSIGHT

Trade Wars Escalate and Harm All

  • Tariff wars escalate until one side breaks, historically harming both economies.
  • Using tariffs as a hammer to fix trade imbalances tends to fail long-term.
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