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Comment by klodolph | Hacker News Reader

This surprises nobody. People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP. Greater economic uncertainty and higher savings rates. Difficult labor market.

The only question is the depth and the duration of the dip.

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It's interesting that the Great Depression was triggered by tariffs.

https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...

That's what put "Great" in Great Depression. Let's see if this one will be "great again".

My understanding is that it was more the 9000 bank failures effectively created a credit crunch. Like if a bank closes and there's no replacement, then most small business were unable to get loans. Farmers who couldn't afford to plant new crops, factories can't improve equipment, inventory get's squeezed across the supply chain, ect. Exports were about 5% of GDP, suggesting that maybe tarrifs may have been the trigger but weren't the primary cause of the depression.

https://www.sjsu.edu/faculty/watkins/depression.htm

Then after that, they passed Hawley Smoot Tariff Act to make up for the budget short fall. That caused an already bad situation to get much, much worse.

Banking crises are largely accounting problems and can - mostly - be fixed from accounting.

There will be winners and losers, and many people won't like the result, but it's not going to end in a Great Depression.

Tariffs - on the other hand - can break your actual, real, non-financial economy - which cannot be fixed by accounting.

The problem was tightening the money supply, this is common knowledge. It is why the central bankers always flood the system with liquidity when things go south now.

I would honestly pay a monthly fee for a board like this that is completely devoid of political nonsense. It is just so boring to read in every subject.

Though, to be fair, the level of tariffs we're talking about in the 30s was like 60-70%; that's a very far cry from where we're at today.

Didn't Trump campaign on a 60-100% tariff on importers buying from China?

Given importers have been paying tariffs averaging close to 20% since Trump raised them back during his first term, that would imply that they'll be close to 40% in a week when they get raised again.

> People import goods before tariffs because the price is lower, and that money going to trade isn’t going to GDP

It does, in inventories. But 34 have 77% reporting on inventories and 85% on imports [1]. To the extent this model is saying something, it’s to watch inventories build and deplete.

[1] https://www.ismworld.org/supply-management-news-and-reports/...

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