Recall CEA has asserted that imported items costs (incl tariffs) have fallen relative to domestically produced, based mostly on conjoining 2017 IO tables and PCE knowledge. I questioned whether or not imported items costs and costs of shut substitutes have fallen. To research, I do one thing easier: take a look at metal import costs (ex-tariffs) and metal PPI (incl. tariffs).
Determine 1: Import worth index for iron and metal (tan), PPI for chilly rolled metal (blue), each in logs 2025M01=0. Supply: BLS, and writer’s calculations.
Efficient June 4, a 50% Part 232 tariff has been in impact, rising from the earlier 25%. Since January 2025, the import worth index has fallen 3.5%, whereas the metal/iron PPI has risen 22% (log phrases). In order the 50% tariff comes into play, we should always count on — on internet — continued will increase within the worth of metal.
Extra dialogue at NYT.
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