Re tariffs, stephen mirans wrote a piece " a users guide to restructuring the global economy" where he concludes tariffs are risky but a likely outcome is that the cost is born by the tariffed nation whose currency depreciates apx the amt of the tariff this causing little price change to the tariffing country. So the US could make a ton of money off tariffs without it changing much for their consumers.
Read it. I know that's is his hope but I question whether it works in practice. 1. China is the example used but they are much more likely to intervene in fx markets than Canada. 2. The theory doesn't hold if Canada can find other export markets for their goods to replace American customers. 3. Short term it is inflationary, currency would not adjust quick enough to account for tariffs being implemented over night.
Re tariffs, stephen mirans wrote a piece " a users guide to restructuring the global economy" where he concludes tariffs are risky but a likely outcome is that the cost is born by the tariffed nation whose currency depreciates apx the amt of the tariff this causing little price change to the tariffing country. So the US could make a ton of money off tariffs without it changing much for their consumers.
Read it. I know that's is his hope but I question whether it works in practice. 1. China is the example used but they are much more likely to intervene in fx markets than Canada. 2. The theory doesn't hold if Canada can find other export markets for their goods to replace American customers. 3. Short term it is inflationary, currency would not adjust quick enough to account for tariffs being implemented over night.