Reciprocity I get but on stuff we need to import?/If that 1981 IBM PC went up in price by 2% per yr.../McCormick speaks
I understand dressing down some of our trading partners for egregious tariffs they place on US exports and the desire to threaten/implement reciprocal tariffs in order to encourage them to lower their tariffs. What I don't understand is putting a tariff on an imported item that we don't and will never produce enough of in the US. I say this because of the new copper tariff proposed which would follow steel and aluminum. According to Google Gemini, we import about 44% of our copper needs. I'll add that copper is just about the most industrial metal in the world in terms of its breadth of crucial uses, including in housing. According to the International Copper Association, "One ton of copper brings functionality to 40 cars, powers 100,000 mobile phones, enables operations in 400 computers and distributes electricity to 30 homes." Among many other things. Would it be nice to produce all of it here so as not to rely on anyone? Sure, but not remotely realistic.
Copper today is at a fresh record high in response
Conventional wisdom has it that just a little bit of inflation, about 2% give or take, is a good thing and god forbid prices actually go down, aka deflation. I've spent endless energy pushing back against the belief that all deflation is bad with the best example being technology products where a massive industry has been created and our lives have changed for the better because of ever lower prices with ever better advancements. That IBM PC desktop that cost $2,000 in 1981 would be about $4,800 today if the price went up 2% per year. Instead, you can pay less than $2,000 today for a computer that is as powerful as a mainframe computer was back then.
The Bank of Japan has spent decades trying to create inflation even though their populace has benefited from a stable cost of living over this time frame. So what happens when the BoJ is now successful in generating higher inflation? Yesterday Bloomberg News has a story that says "Japanese Prime Minister Shigeru Ishiba is planning measures to ease the impact of inflation on consumers...The government spokesman pointed to a range of existing policy efforts, including cash handouts to low income households and regional governments, and releasing emergency rice stockpiles to curb soaring rise prices."
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