Source: Paul Krugman
by Paul Krugman
“Many news reports treat the absence of a large rise in inflation since Liberation Day as a puzzle, a big problem for economists. And of course Trump and co. are crowing that all the experts were wrong. But if you look at the actual numbers, there isn’t much if any puzzle. The key point is that effective tariff rates have risen much less than headline rates. Partly this is because there have been some major carve-outs, like Apple’s exemption from tariffs on India. Partly it’s because high tariffs have led firms to take advantage of exemptions that were already on the books but weren’t worth the paperwork when tariffs were lower.” [editor’s note: Or maybe it has something to do with the fact that price increases are a symptom of inflation, not inflation itself? – TLK] (02/01/26)
https://paulkrugman.substack.com/p/a-wonkish-note-on-tariffs-and-inflation