White House Advisor: Minimal Risk of Tariffs Causing Inflation
On Tuesday, Eastern U.S. time, Stephen Miran, a senior White House economic advisor, chief economist, and chairman of the Economic Advisory Council, stated that there is minimal risk of President Trump's tariff policies reigniting inflation. He mentioned in a program, "Rare events do happen. We might encounter a pandemic, a meteor, or something else. But so far, there is no evidence that this will occur."
When asked if comparing tariffs causing price increases to extremely rare events was justified, Miran responded, "I'm not being dismissive. What I mean is, predictions are difficult, and we should always speak in terms of probabilities and possibilities." He also stated that he doesn't have a crystal ball to foresee the future, nor does anyone else.
At the same time, Miran highlighted a new report from the White House Council, which emphasizes that although there is concern that Trump's tariffs could drive up prices, the prices of imported goods have actually decreased from December last year to May this year, supporting his view.
Trump Uses Report to Pressure Powell to Cut Rates
Trump used this report to once again pressure Federal Reserve Chairman Powell. On his social media platform, Truth Social, he stated: "A new study led by the esteemed Chairman Stephen Miran, Ph.D., of the Economic Advisory Council (CEA), finds that tariffs have no effect on inflation."
He also wrote, "In fact, the study indicates that import prices are actually decreasing, just as I've always said. Fake news and so-called 'experts' were wrong again. Tariffs are making our country 'prosper.' Many new factories, new jobs, and trillions of dollars are pouring into the USA."
Trump further added, "Someone should show this new study to the 'too late' Jerome Powell, who has been whining like a baby about non-existent inflation for months, refusing to do what’s right. Lower the rates, Jerome—now’s the time!"
The Relationship between Tariff Policies and Inflation and Future Implications
In April this year, Trump announced the so-called "reciprocal tariffs," extending the deadline twice for countries to reach bilateral trade agreements with the U.S. and avoid maximum rates, with the current deadline of August 1. While some individual product prices have increased due to tariffs, Trump's policy has not yet fueled the overall inflation feared by businesses and consumers.
However, many economists still expect prices to rise in the coming months and point out several reasons why price increases have not yet occurred. First, Trump has delayed implementing many of the strictest "Day of Liberation" tariffs; second, there is a lag between tariffs and their actual price impact; third, many companies preemptively stocked up earlier this year.
In response, Miran stated, "Of course, eventually, you know, the meteor or something else might strike. But we’ve waited several months, and there's no evidence to show for it. Our report clearly shows that starting from March, import component prices have decreased, while overall prices have remained stable or slightly increased."
Looking ahead, as the August 1 tariff deadline approaches, the actual impact of tariff policies on inflation, as well as the Federal Reserve's rate decisions, will continue to be closely monitored by the markets. This not only affects the direction of the U.S. domestic economy but will also have a certain impact on global financial markets.
