Figure 1: CPI for food at home (black), USDA Economic Research Service forecast (blue square), implied level including tariffs on Mexican food imports (red triangle). Source: BLS via FRED, ERS, author’s calculations.The object of tariffs is to raise prices going to domestic producers, to encourage production. Hence, assuming that domestic producers don’t raise prices (as is assumed in the above calculation) seems silly — so the above is an understatement of price increase.More By This Author:Biggest Tax Increase EverCanadian Oil, Tariffs, And Gas Prices In PADD 2The Price Elasticity Of Avocado Supply, Demand, And Tariff Pass Through
