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Comment by ryan_lane

16 days ago

Increasing cost of imported goods will increase demand on equivalent domestically produced goods, which are also often supply constrained. Locally produced goods will increase their prices as much as the market allows (which is somewhere around the cost of the imported good with the tariff). Tariffs cause inflation as a whole.

When the tariffs are dropped, do you think the price of the imported good is going to go back to the original price? If the domestically produced version is priced near the tariff price, they'll reprice slightly lower than the domestic price, ensuring prices stay high.