Bessent says this:

BREAKING: US Treasury Secretary Bessent says he has seen no inflation from tariffs and Fed Chair Powell's successor is coming in as soon as "weeks" from now.

— The Kobeissi Letter (@KobeissiLetter) June 30, 2025

This is what AI gives me as far as tariffs thus far...

Steel & Aluminum -- +50% on imported steel & aluminum --June 4
Reciprocal imports -- 10% baseline April 5th; 25-50% on 57+ countries delayed until July -- April-July
China -- 10% 20% peaked at 145%, now 30% -- Feb-May
Canada & Mexico -- 25% general, 10% energy -- April 3
Venezuelan oil importers -- 25% on U.S. imports -- April 2
Auto & Auto parts -- 25% nonUSMCA vehicles/parts -- April 3



How is it possible that we see no inflation from these tariffs?! Some are just now coming into the pricing stream, but still...

Part of the problem is that your extremely detailed AI research is wrong.

They'll try to spin it, but tariff impacts are starting to show up.

Why else would he tell Wal Mart to "eat the tariffs" if China was supposed to pay for it?

Quote:

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NEW YORK (Reuters) -Prices for goods made in China and sold on Amazon.com have been rising faster than overall inflation, according to an analysis of 1,400 different products conducted exclusively for Reuters by the analytics firm DataWeave, a sign that tariffs are starting to hit American consumers.

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https://finance.yahoo.com/news/us-prices-china-made-goods-120556433.html

Pinochet said:

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Part of the problem is that your extremely detailed AI research is wrong.

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Then what is correct?

Found some info on possible reasons, but these are stop gap:


June 27, 2025

Aggressive "front-loading"
After the Trump administration announced a range of tariffs on Canada, China, Mexico and dozens of other countries earlier this year, many companies scrambled to stock up, or front-load, on products, parts and other imports to avoid incurring added tariff costs.


Waiting for clarity
Some businesses facing higher tariffs are choosing to hold off on passing any cost increases through to consumers as they wait for the fog around U.S. trade policy to lift.


Lower tariff costs
Although Mr. Trump has announced sky-high tariff rates, the actual duties collected at the U.S. border so far are lower than the official rates. That's because some importers have been able to skirt the levies by storing goods in so-called bonded warehouses or foreign trade zones.

Businesses can use bonded warehouses, which are usually located near major commercial ports, to temporarily



https://www.cbsnews.com/news/inflation-trump-tariffs/

There's a good bit of research around the tariffs in Trump's first term and their correlation (or lack of) to inflation.

I think in all else being equal, your question implies the obvious answer...how could they not be inflationary if they only serve to raise prices.

It's not a vacuum and functions of economic activity, fungibility of products, alternative sources etc all play a role in the overal increase in prices.

Quote:

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The timing of the tariffs clearly shows no correlation with inflation and eliminating tariffs could not plausibly restrain it. The bulk of the tariffs were in place before 2020, yet inflation only began accelerating in March 2021. Clearly, inflation was driven by many sources besides tariffs.

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Economic Policy Institute

Here is the reality as someone who is dealing directly with passing on tariff costs to consumers and to contractors. Yes prices will go up from tariffs. Somewhat. But anyone expecting things to go up 50% or even 10-20% depending on the item is sorely mistaken.

Tariffs can vary wildly and companies will import through 3rd countries and negotiate with suppliers to eat some costs. Additionally we are seeing significant movement on cross border suppliers who have plants in the US and a 2nd country (mainly Canada and Mexico but some others) who are bringing back manufacturing here. In most cases those customers were at a 5-10% premium over competitors, partly because they would be priced out otherwise on commercial scale sales, partly because of the supply chain security. Those suppliers are now, almost without exception, running at 100% capacity. Which means more jobs and hours for US workers.

And remember even with across the board tariffs only the cost of the good, not the transportation, advertising, profit, etc. is tariffed. Using round numbers: you may have a product that costs you $100/unit from China at a 30% tariff but only pay $120 on that. Then you may negotiate (and the Chinese company negotiates with it's suppliers) and you still pay $100 but the tariffed cost goes from $67 to $50. So now your new cost with tariffs is down to $115. This is the kind of technical stuff no one in the outside world sees. Is it more? Yes. But I can also go to a US supplier and pick up some of the slack at $105 to $110, the cost is more, the transportation less, no tariffs, and stock that item. I can then use that as leverage to negotiate better terms with the Chinese company and pay $95/unit and so on.

The end result to the consumer on a 30% tariff could be as little as 5-10% in a lot of cases. Depends on how many middle men there are generally. The more, the higher.

Now as an example the most common thing my company sells was averaging between $75-95/unit depending on where and what level you were buying in 2021. Now we're seeing that between $110-150. And it had absolutely nothing to do with the tariffs. We're starting to see a bit of that come down, but that is mostly due to the prices being so high in conjunction with interest rates that it is now pricing out a good segment of the general public and a hostile take over in a competitor in a pretty consolidated industry nationwide driving some prices down in a desperate need for cashflow.

The inflation during the Biden years wasn't just insane, it was ruinous. Quite frankly we made a lot of money from it, but we would all be happier with everything having only inflated 20% as opposed to 60% plus on a huge swath of what we sell. In comparison, the tariffs don't worry me at all. Cause a lot of reflux from the whiplash personally, but the consumer never really sees that.

I'm seeing steel prices going up, but not in direct proportion. Market optionality allows some prospective users to shift materials. Also, even if raw materials increase by 50%, the significant costs associated with fabrication, coating, overheads, delivery, and installation don't automatically jump 50% as well. So getting a steel end-item in place may be an extra 20% rather than 50%.

I just received some goods in, which normally costs me less than 3k to land. It cost me 14,500 this time. Im trying to absorb some of that cost, but prices will go up.

I've seen costs rise all across the board for parts we buy.

But, all that said, it's not been nearly as bad as I originally feared.

Pinochet said:

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Part of the problem is that your extremely detailed AI research is wrong.

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AgGrad99 said:

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I just received some goods in, which normally costs me less than 3k to land. It cost me 14,500 this time. Im trying to absorb some of that cost, but prices will go up.

I've seen costs rise all across the board for parts we buy.

But, all that said, it's not been nearly as bad as I originally feared.

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Yeah...that's what I looked like when customs hit our account for the D&T

To be clear, that was just the transport costs (including D&T), not the price of the goods.

Inflation != Price Increases

Inflation leads to price increases because the currency is debased but not all price increases are caused by inflation.

Thanks for the enlightenment.
Biggest issue I see affecting price across the board is the resulting rise in wages from "transitory" inflation causing higher prices from box stores vs. online/automated retailers.
Our inflated wages from just inflation is causing the largest difference.

The problem figuring out what the economic impact from inflation or tariffs is that the government keeps altering how math works to calculate these areas. This happens under all administrations not just Trumps. Unfortunately, we cannot trust any figures that the government releases

Obama started the lies. Biden made them worse. Now the Trump admin is using them. I don't believe anything coming out of DC.

Logos Stick said:

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Pinochet said:

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Part of the problem is that your extremely detailed AI research is wrong.

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Then what is correct?

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"Tariffs are good and don't lead to inflation and if they do, inflation is good actually."

/MAGA NPCs

Tariffs are deflationary in the long run as the increased costs actually work to lower demand. And when the exporting country has to start dealing with lower demand, they start eating alot of the costs themselves.

Also, any inflation from tariffs is merely short-term. Inflation is exclusively a monetary phenomenon. 2022 happened because of helicopter money from 2020. New money direct in pockets of consumers at the same time as a supply shock equaled massive inflation.

Tariffs cause a cost shock which in turn causes a demand shock. There is no direct link between tariffs and inflation, as the money supply isn't changed.

The bonded warehouses only delays the cost of tariffs as I understand it.

Its basically a pay as you go mechanism vs unloading a 3 month supply and paying it all that day

Ulysses90 said:

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Inflation != Price Increases

Inflation leads to price increases because the currency is debased but not all price increases are caused by inflation.

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This

With as many people on this board who are familiar with Milton Friedman its amazing we keep having this discussion.

Inflation is always tied to money supply. Period.

we are still seeing our main competitor lower prices in the market despite being more reliant on China than we are. It doesn't make sense, but not much does these days.

Silent For Too Long said:

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Ulysses90 said:

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Inflation != Price Increases

Inflation leads to price increases because the currency is debased but not all price increases are caused by inflation.

---

This

With as many people on this board who are familiar with Milton Friedman its amazing we keep having this discussion.

Inflation is always tied to money supply. Period.

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Let me explain. Prices make up the CPI, which is the official measure of inflation.

If the U.S. places a 25% tariff on imported steel:

• Domestic manufacturers pay more for steel.
• They raise prices on cars, appliances, etc.
• CPI records those price increases = inflation rises.

Bessent himself considers them potentially inflationary, thus his comment.

We all understand that aggregate money supply has not gone up.

You still fail to understand that its still the same money chasing the same goods. If the good go up in price, it becomes completely dependent on the demand for those goods to sustain. And it usually doesn't without one party taking a huge hit, either the importer (who would need demand to stay static at higher prices), or the exporter (who can create static demand by eating price on their end). But usually, less goods are imported which leads to LOWER prices.

Logos Stick said:

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Silent For Too Long said:

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Ulysses90 said:

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Inflation != Price Increases

Inflation leads to price increases because the currency is debased but not all price increases are caused by inflation.

---

This

With as many people on this board who are familiar with Milton Friedman its amazing we keep having this discussion.

Inflation is always tied to money supply. Period.

---

Let me explain. Prices make up the CPI, which is the official measure of inflation.

If the U.S. places a 25% tariff on imported steel:

• Domestic manufacturers pay more for steel.
• They raise prices on cars, appliances, etc.
• CPI records those price increases = inflation rises.

Bessent himself considers them potentially inflationary, thus his comment.

We all understand that aggregate money supply has not gone up.

---

Yeah thanks, I understand why people keep getting this wrong.

It's still wrong. Because of opportunity costs and a variety of other things you aren't factoring in.

Once again. The bottom line is tarrifs do not increase the money supply, and do not cause inflation.

Trump is going hard after Powell to cut rates. I suspect he wants it done before it shows in CPI or PCE


A few months ago I saw Bessent suggest something like a 10% tariff could lead to price increases of around 1 to 2%. Yellen recently said she expects year over year CPI inflation to increase to 3.0%, which is only 0.6% higher than it is currently.

BREAKING: The White House says President Trump called Fed Chair Powell and asked him to lower rates. https://t.co/Q0kffnOWV3

— The Kobeissi Letter (@KobeissiLetter) June 30, 2025

Powell claims to be data driven often. If Powell had the case to lower rates in September 2024, he has an overwhelming case today...but he's not lowering.

It's nakedly political to spite Trump.

Moreso than Powell's navigation of the levers of monetary policy, the political stonewalling by the Fed Chairman is what Trump is attacking.

Heineken-Ashi said:

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You still fail to understand that its still the same money chasing the same goods. If the good go up in price, it becomes completely dependent on the demand for those goods to sustain. And it usually doesn't without one party taking a huge hit, either the importer (who would need demand to stay static at higher prices), or the exporter (who can create static demand by eating price on their end). But usually, less goods are imported which leads to LOWER prices.

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I understand it completely. CPI is the measure. If the basket of goods/services they use in the index goes up, inflation - as officially measured, rises. Unless the demand for others good/services in the basket goes down and subsequently the prices, because more money is having to be spent on steel based products, then inflation rises. It's complex and there is no guarantee less demand in other areas creates a counter balance.

Logos Stick said:

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Bessent says this:

BREAKING: US Treasury Secretary Bessent says he has seen no inflation from tariffs and Fed Chair Powell's successor is coming in as soon as "weeks" from now.

— The Kobeissi Letter (@KobeissiLetter) June 30, 2025

This is what AI gives me as far as tariffs thus far...

Steel & Aluminum -- +50% on imported steel & aluminum --June 4
Reciprocal imports -- 10% baseline April 5th; 25-50% on 57+ countries delayed until July -- April-July
China -- 10% 20% peaked at 145%, now 30% -- Feb-May
Canada & Mexico -- 25% general, 10% energy -- April 3
Venezuelan oil importers -- 25% on U.S. imports -- April 2
Auto & Auto parts -- 25% nonUSMCA vehicles/parts -- April 3



How is it possible that we see no inflation from these tariffs?! Some are just now coming into the pricing stream, but still...

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Because tarrifs aren't inflationary because inflation is a monetary result. Inflation is result of monetary supply expansion.

Tarrifs may cause temporary, localized price increases but, if the market cannot support it, consumers will find another option. If a such price increases from tarrifs could be sustained, then the companies were undervaluing their product.

Tariffs = cost increases in specific areas
Inflation= less valuable dollar effecting the entire economy

Logos Stick said:

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Heineken-Ashi said:

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You still fail to understand that its still the same money chasing the same goods. If the good go up in price, it becomes completely dependent on the demand for those goods to sustain. And it usually doesn't without one party taking a huge hit, either the importer (who would need demand to stay static at higher prices), or the exporter (who can create static demand by eating price on their end). But usually, less goods are imported which leads to LOWER prices.

---

I understand it completely. CPI is the measure. If the basket of goods/services they use in the index goes up, inflation - as officially measured, rises. Unless the demand for others good/services in the basket goes down and subsequently the prices, because more money is having to be spent on steel based products, then inflation rises. It's complex and there is no guarantee less demand in other areas creates a counter balance.

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You start the thread by asking how something is possible to not be doing what it was expected to do by "experts". Then, after multiple people explaining it to you, you argue with the same faulty assumptions that led to you not understanding in the first place.

Heineken-Ashi said:

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Logos Stick said:

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Heineken-Ashi said:

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You still fail to understand that its still the same money chasing the same goods. If the good go up in price, it becomes completely dependent on the demand for those goods to sustain. And it usually doesn't without one party taking a huge hit, either the importer (who would need demand to stay static at higher prices), or the exporter (who can create static demand by eating price on their end). But usually, less goods are imported which leads to LOWER prices.

---

I understand it completely. CPI is the measure. If the basket of goods/services they use in the index goes up, inflation - as officially measured, rises. Unless the demand for others good/services in the basket goes down and subsequently the prices, because more money is having to be spent on steel based products, then inflation rises. It's complex and there is no guarantee less demand in other areas creates a counter balance.

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You start the thread by asking how something is possible to not be doing what it was expected to do by "experts". Then, after multiple people explaining it to you, you argue with the same faulty assumptions that led to you not understanding in the first place.

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Are you really implying that Bessent was saying he's seen no inflation from tariffs because tariffs can't cause inflation? LOLOL. What I stated and my understanding is completely correct.


Jerome Powell on June 25, 2025:

"There will be some inflation from tariffs coming," Powell said under questioning from members of the Senate Banking Committee. "Not yet, but over the course of the coming months."


https://apnews.com/article/fed-powell-tariffs-inflation-bias-2a6a403f44697d444dac67c6fd3ff214

Tariffs are a tax on the American people and taxes aren't inflationary so tariffs won't be either.

One time price increases due to tariffs will come. There is no way a 50% tariff on steel and aluminum won't be factored into car, truck, construction and heavy equipment costs.

Silent For Too Long said:

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Logos Stick said:

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Silent For Too Long said:

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Ulysses90 said:

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Inflation != Price Increases

Inflation leads to price increases because the currency is debased but not all price increases are caused by inflation.

---

This

With as many people on this board who are familiar with Milton Friedman its amazing we keep having this discussion.

Inflation is always tied to money supply. Period.

---

Let me explain. Prices make up the CPI, which is the official measure of inflation.

If the U.S. places a 25% tariff on imported steel:

• Domestic manufacturers pay more for steel.
• They raise prices on cars, appliances, etc.
• CPI records those price increases = inflation rises.

Bessent himself considers them potentially inflationary, thus his comment.

We all understand that aggregate money supply has not gone up.

---

Yeah thanks, I understand why people keep getting this wrong.

It's still wrong. Because of opportunity costs and a variety of other things you aren't factoring in.

Once again. The bottom line is tarrifs do not increase the money supply, and do not cause inflation.

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The people trying to run a business don't care about the definition. Just the result.

Tarrifs directly resulted in a 12% increase in one of our product lines.

The rest have seen price creep similar to worse. Sales are down. It's bad on top of already reduced margins since Covid.

I think you guys are splitting hairs between the definion of inflation and an increase in prices showing up in CPI and PCE data.

I can agree with lowering rates once we see what the tariff impact is, but to 1% is insanity.
It's pretty clear at this point Trump doesn't really care about fiscal responsibility between the OBBB deficit and calling for 1% interest rates.
He is the definition of a fiscal RINO.

Tariffs cannot be both a tax AND inflationary.

Taxes depress economic activity, which reduces demand and therefore inflation.

So they are one or the other, but not both