Fed Study Vindicates Trump Trade Policy: 150 Years of Evidence Shows Tariffs Lower Inflation

In recent years, there has been a lot of debate surrounding the impact of tariffs on inflation. Many economists and policymakers have argued that increasing tariffs will lead to higher prices for consumers. However, a recent study by researchers at the Federal Reserve Bank of San Francisco has challenged this conventional wisdom.

The study, which examined major tariff changes from 1870 through 2020 in the United States, United Kingdom, and France, has found evidence that tariffs actually lower inflation instead of increasing it. This conclusion has significant implications for economic policy, particularly in light of the Trump administration’s trade policies.

For years, there has been a prevailing belief that when countries raise tariffs, it leads to higher prices for goods and services. This theory has been used to justify the reduction of tariffs and the promotion of free trade. However, the findings of this study have turned this belief on its head.

The researchers at the Federal Reserve Bank of San Francisco analyzed 150 years of data and found that when tariffs were increased, prices actually fell. This was true for all three countries studied, challenging the long-held belief that tariffs lead to inflation.

The study’s findings have significant implications for current economic debates, especially in light of the Trump administration’s trade policies. President Trump has been a vocal advocate for increasing tariffs, arguing that it will protect American industries and create jobs. However, many critics have argued that these policies will lead to higher prices for consumers.

The study’s findings provide a much-needed vindication for the Trump administration’s trade policies. It shows that tariffs can actually lower prices for consumers, providing a boost to the economy and protecting American industries. This is an important finding at a time when the global economy is facing significant challenges, and countries are increasingly turning towards protectionist policies.

The researchers at the Federal Reserve Bank of San Francisco also found that the impact of tariffs on inflation depends on the type of goods being imported. They found that tariffs on raw materials and intermediate goods, which are used in the production of final goods, have a greater impact on inflation than tariffs on final goods themselves. This means that tariffs can be used strategically to target specific industries and protect them from foreign competition.

The study’s findings have far-reaching implications for the future of trade policies. It challenges the belief that free trade and reducing tariffs is always the best approach. It also highlights the need for a more nuanced approach to trade policies, one that takes into account the specific industries and goods being imported.

The post Fed Study Vindicates Trump Trade Policy: 150 Years of Evidence Shows Tariffs Lower Inflation, as reported by Breitbart, is a significant development in the ongoing debate surrounding tariffs and their impact on the economy. It provides concrete evidence that tariffs can actually lower inflation, contrary to popular belief.

In conclusion, the study by the Federal Reserve Bank of San Francisco has challenged the conventional wisdom that tariffs lead to higher inflation. It shows that when countries increase tariffs, prices actually fall, providing a boost to the economy and protecting domestic industries. This finding has significant implications for economic policy and trade negotiations in the future, and it is a welcome vindication for those who have advocated for a more protectionist approach to trade.