The impact of Trump’s tariffs on inflation is a hot topic of conversation. Researchers McKibbin-Hogan-Noland have used the G-Cubed model to predict that inflation will rise by 0.6 percentage points above baseline due to the tariffs and mass deportation in 2025. These findings are further supported by Goldman-Sachs, who also foresee a similar impact from the tariffs.
To put this into perspective, imagine adding 0.6 percentage points to the expected inflation in September 2025, as per the U.Michigan survey. The result is a clear indication of how these policies could shape our economic landscape.
Interestingly, the numbers tell a compelling story. A mere deportation of 1.3 million net immigrants could lead to a 0.35 percentage point increase in inflation by 2025, soaring to 0.55 percentage points by 2026. On the other end of the spectrum, the deportation of 8.3 million net immigrants paints a much starker picture, with a predicted 2.25 percentage point rise in inflation by 2025, escalating to 3.5 percentage points by 2026. These statistics underscore the significant impact that policy decisions can have on our economy.
My recent discussion on tariffs and their effect on the cost of living on WPR generated a lot of interest. For those looking to delve deeper into this topic, join the conversation at Main Street Agenda: Inflation in Milwaukee on October 15 alongside my colleague J. Michael Collins and other esteemed panelists.
As we navigate the complex web of tariffs, immigration policies, and their repercussions on inflation, it’s crucial to stay informed and engaged. The numbers speak for themselves, underscoring the need for careful consideration and thoughtful analysis in shaping our economic policies. Let’s keep the conversation going and strive for a better understanding of the forces at play in our economy.
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