? (Host) 00:00.070
she's joining us now scott lincecum vice president of general economics at the cato institute scott thanks for joining us this morning
Scott Lincicome (Vice President of General Economics) 00:07.670
thanks for having me
? (Host) 00:08.990
so i'm not going to deal with what president trump said i but there is a general view scott that tariffs have not been as bad as expected either inflation or in growth terms what's your response to that
Scott Lincicome (Vice President of General Economics) 00:23.990
yeah i think there's two things first there has been some surprises related to the tariffs mainly related to the lack of governments retaliating you know last time trump imposed a bunch of tariffs a handful of different governments retaliated this time it's just a it's less
Scott Lincicome (Vice President of General Economics) 00:43.030
there's china there's canada and the rest so that's been a bit surprising the other surprise maybe is that importing companies that are paying the tariffs aren't passing these on to consumers as much so there's been less pass through but overall the tariffs are doing pretty much
Scott Lincicome (Vice President of General Economics) 00:59.230
what we expected they are increasing prices in the united states whether at the company level or at the retail level they do appear to be a drag on american manufacturing manufacturers are reporting constantly they're having issues with raw materials pricing and with uncertainty
Scott Lincicome (Vice President of General Economics) 01:19.600
and that they are a bit of a drag on growth but look this is a the US economy is is massive and services mainly and not that trade integrated so the idea that the tariffs alone were going to cause a recession or cause inflation to go nuts was really never in the cards a new
Scott Lincicome (Vice President of General Economics) 01:39.190
serious economists were saying that
? (Host) 01:41.910
let's get to the particular contribution in this really terrific article that you wrote scott which doesn't look at the macro impact per se or doesn't look at what particular tariffs are there but looks at the complexity of just trying trying to comply it is a i don't know how
? (Host) 01:59.030
else to say it a disaster and and it walked me through what you found when you looked at if you're a just a regular business trying to do something what it takes to figure out what the actual tariff is on the product
Scott Lincicome (Vice President of General Economics) 02:12.550
yeah it is incredible when you talk to anybody who's actually doing this is in the biz for logistics and tariff compliance and if they have any hair left they're still ripping it out still because if you compare the US tariff regime today to what we had just a few years ago it
Scott Lincicome (Vice President of General Economics) 02:32.150
is a night and day difference in terms of compliance the number of tariff regimes has gone from
? (Host) 02:39.230
UC yeah we've got a graphic of this scott i don't know if you you can see it but there's what seventeen different tariff regimes there compared to exactly three in two thousand seventeen
Scott Lincicome (Vice President of General Economics) 02:49.630
exactly and the revisions of the tariff code this year are now into the fifties compared to about three or four back in twenty seventeen but the other big thing is how these tariffs all interact with each other because the administration has imposed a bunch of carve outs they
Scott Lincicome (Vice President of General Economics) 03:08.710
have these trade deals they have requirements for the aluminum and steel and copper content in the imports so if you're bringing in a washing machine or a can of beer you need to know it's metals content certain tariffs do apply on top of them of tariffs others don't so trying
Scott Lincicome (Vice President of General Economics) 03:28.030
to figure this out trying to map this all out is something we took on at cato over the fall and i can tell you it's it's almost comical when you look at the difference again from a very simple three step regime back in twenty seventeen to this labyrinth this maze that doesn't
Scott Lincicome (Vice President of General Economics) 03:46.430
even capture all the complexity is more than a dozen steps and it's other thing that's important it's always changing we've posted our original analysis in late november we're going to have to redo it in the new year because it's already changed again justin just