Tag: tariff shocks
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Tariff Shocks in History: Lessons for 2025 Policy Decisions
From Smoot-Hawley to 2025: The enduring question of tariff shocks Tariff shocks—sudden, large changes in import duties—have long stirred discussions among policymakers, businesses, and households. The hypothetical 15% tariff increase in 2025, described as the largest in the modern era, invites a careful look at what history can tell us about likely outcomes for unemployment…
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Tariff Shocks in History: Unemployment and Inflation
Introduction Tariff shocks—sudden, sizable changes in import taxes—have long been a tool of national policy. When tariffs jump sharply, they ripple through consumer prices, production costs, and labor markets. Understanding how past tariff shocks affected unemployment and inflation helps policymakers gauge the likely consequences of a large, rapid tariff increase like the 2025 15% spike…
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What History Reveals About Tariff Shocks and the Economy
Understanding a Tariff Shock A tariff shock refers to a sudden and sizable change in import taxes that alters the relative costs of goods, influences production and pricing, and can ripple through the economy. The recent 15% increase in the average U.S. tariff rate in 2025 stands out for its magnitude in the modern era.…