{"id":270233,"date":"2025-02-02T23:16:42","date_gmt":"2025-02-02T23:16:42","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2025\/02\/02\/i-guess-i-picked-the-wrong-week\/"},"modified":"2025-06-25T17:09:30","modified_gmt":"2025-06-25T17:09:30","slug":"i-guess-i-picked-the-wrong-week","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2025\/02\/02\/i-guess-i-picked-the-wrong-week\/","title":{"rendered":"I Guess I Picked the Wrong Week\u2026"},"content":{"rendered":"

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to you know what<\/a> (apologies to Abrahams and the Zuckers).<\/p>\n

In one day, US taxes roughly $2.4 trn worth of goods (2023 amounts). Biggest one year<\/em> tax increase in dollar terms since\u2026 ever, at $364 bn (if Trump goes through with plans). Automatic<\/em> escalation clauses if the target countries retaliate (Canada already has declared).<\/p>\n

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My $364 billion tax revenue increase is based on a constant import levels. Assuming a (generously high) elasticity of one yields a $290 billion tax increase. The former is 1.2% of 2024Q4 GDP, the latter is 1%.<\/p>\n

Estimates of the impact, given the reality, from PIIE<\/a>. The authors of that study did not believe Canada and Mexico would retaliate. I think, for the former, that assumption has been OBE.<\/p>\n

Must say I did not expect the trade war to begin in earnest so quickly. And I did not expect Canada and Mexico would be the primary targets, when I first wrote up the syllabus. What happened to China as the most egregious trade policy offender (a view I actually shared)?<\/p>\n

This might entail re-arranging my Econ 442 teaching plan.<\/p>\n

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Thanks, Trump!<\/p>\n

PS: Can I freeze avocados and tomatoes? Asking for a friend.<\/p>\n

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