Post #25610 by ptheland on the US Policy board

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For all but purely inelastic goods, both consumers and producers will bear some of the cost of the tariff.

I would argue that cell phones are pretty inelastic. And there aren't a lot of choices for producers of microchips and other electronics. So they're pretty inelastic as well.

I also pointed Michael to microeconomics in an earlier post to gain an understanding of the details.

But more generally, a significant tariff on virtually everything imported from China--which is my understanding of Trump's proposal--would cause disastrous effects on the US economy. I went into that up thread, but it would almost certainly cause significant inflation in consumer goods, with no corresponding inflation of wages.

--Peter

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