● Tariff Shockwave
<h4>Real-Time Analysis of Trump's Tariffs: Short-Term and Mid-Term Market Impact and Inflation Forecasts Based on the Latest Harvard Paper</h4>
<p>
This article systematically analyzes the short-term and mid-term impact of President Trump's tariff policies on actual prices and the Consumer Price Index (CPI), real-time price fluctuation data for imports and domestic products, the structure of price increases by country of origin, and future inflation scenarios. In particular, based on ultra-fresh data released by a Harvard Business School professor, we highlight key insights into tariff increases and global supply chains, the US consumer market, and the risk of future price increases at each point in time. By the end of this article, you will understand how real economic indicators are shaken and have a clear understanding of CPI forecasts, which are essential for investment decisions.
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<h3>Background and Research Methods of the Real-Time Tariff Impact Tracking Paper</h3>
<ul>
<li>Utilizing the paper by Professor Alberto Cavallo's team at Harvard Business School</li>
<li>Collecting daily price data from major US online retailers up to May 7, 2024</li>
<li>Analyzing approximately 270,000 products' barcodes, using AI for tracking, and gathering country of origin information</li>
<li>Domestic products = US-made, imported products = foreign-made</li>
</ul>
<h3>Key Points of Price Fluctuations in the US Consumer Market by Tariff Announcement Date</h3>
<ul>
<li>March 4: 25% tariffs on Canada and Mexico, 10% additional on China – Initial market shock</li>
<li>April 2: 'Liberation Day' Trump imposes 10% across-the-board tariffs, 125% on China – Secondary shock to stock market and prices</li>
<li>Imported goods (red line) prices surge, domestic goods (blue line) also rise in tandem</li>
<li>Imported goods continue to rise, domestic goods jump once and then continue a gradual but steady upward trend</li>
</ul>
<h3>Differential Price Increase Mechanisms and Structural Interpretations for Domestic and Imported Goods</h3>
<ul>
<li>Soaring imported goods: Passing on tariff costs and supply chain costs</li>
<li>Rising domestic goods: Price transfer of imported raw materials/parts, demand concentration, preemptive price increases in anticipation of uncertainty</li>
<li>Similar patterns repeated during past exchange rate and supply chain shocks</li>
</ul>
<h3>Detailed Price Fluctuations by Country of Origin: Comparison of the US, China, Mexico, and Canada</h3>
<ul>
<li>US-made: Sharp rise in March followed by a gradual, continuous upward trend</li>
<li>China-made: Steady rise in March and April, continuing a steep upward trend in May</li>
<li>Mexico/Canada: Sharp rise immediately after March, then fall again due to agreement/tariff elimination (USMCA impact), only a temporary effect</li>
<li>This phenomenon is a result of the US-Mexico-Canada trade agreement and the immediate reflection of tariff rollbacks</li>
</ul>
<h3>Actual Tariff Pass-Through, Inflation Ripple Effects, and Scenario Forecasts</h3>
<ul>
<li>Short-term: 1.2%P increase in imported goods, 0.6%P increase in domestic goods when tariffs were introduced in March</li>
<li>Mid-term: Additional rise in imported goods underway, expected to take several months for complete pass-through</li>
<li>As in past cases (2018 tariff war), 20-30% reflected immediately, with repeated price increases over the remaining months</li>
<li>Scenario 1 - Maintaining current levels: Additional 2-3%P increase expected in the next 1-2 quarters</li>
<li>Scenario 2 - Retaliation/Escalation: Possibility of up to 5%P cumulative increase</li>
</ul>
<h3>Estimates of Additional CPI Increase and Summary of Wall Street Forecasts</h3>
<ul>
<li>Base scenario: Tariff-driven price increase → Expected additional CPI increase of 0.5-0.7%P</li>
<li>Possibility of more than 1.0%P if the tariff war intensifies</li>
<li>Nomura Securities also raised its year-end core PCE forecast by 1%P</li>
<li>Most Wall Street research: Sees an additional 0.5-1.0%P upside risk to inflation if tariff situation persists</li>
<li>Some extreme models predict 1.1-1.7%P, but this is not the mainstream interpretation</li>
</ul>
<h3>Implications for the Market and Investment Strategies</h3>
<ul>
<li>Tariffs have an immediate and gradual impact on prices in real-time</li>
<li>Need to re-examine domestic and international economic outlook, global supply chains, exchange rates, and investment strategies</li>
<li>Need to continuously check whether additional tariffs are passed on, the pace of trade negotiations, and the reaction of stock and commodity markets</li>
<li>Higher probability that the pattern of gradual price reflection after a short-term shock, as in the past, will be repeated</li>
</ul>
<Summary>
- Trump tariffs' initial introduction in March-May confirmed price increases for both imported and domestic goods in real-time
- Price increases for Chinese-made goods particularly severe by country of origin, some stabilization in North America (Mexico/Canada) due to tariff withdrawal
- Tariff pass-through process proceeds with immediate + additional reflection over several months, causing sequential increases in CPI and inflation
- If current policies continue, additional short-term 2-3%P increase, CPI potentially rising by 0.5-0.7%P, up to 1%P+
- Must pay attention to the stage-by-stage changes in tariff impacts in the global economy and supply chain, and in investment decisions
</Summary>
<h4>Analysis of Trump's Tariff Shock: Real-Time Data Reveals Short-Term Market Changes and Inflation Forecasts</h4>
<p>
Trump tariff policies, inflation, Consumer Price Index (CPI), global supply chains, economic outlook
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[Related Articles...]
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<li><a href="https://nextgeninsight.net/?s=%EA%B4%80%EC%84%B8">The Actual Impact of Trump's Tariff Policies on the Korean Economy</a></li>
<li><a href="https://nextgeninsight.net/?s=CPI">2024 US CPI Latest Data and Investment Strategies</a></li>
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