This episode explores the potential impact of escalating tariffs on the US economy, specifically focusing on the disruption of supply chains and its effect on consumer prices. Against the backdrop of already implemented tariffs and the uncertainty surrounding future trade policies, the discussion centers on the plummeting container bookings and the cancellation of import orders from China. More significantly, the interview delves into the analysis of high-frequency data indicating a high probability of empty shelves during the upcoming holiday season due to disruptions in the planning and shipping periods. For instance, the guest economist highlights the complete pass-through of Chinese tariffs to US importers and the limited pass-through to consumer prices, suggesting that profit margins are being squeezed. This absorption of costs by businesses raises concerns about the potential for reduced investment, hiring slowdowns, and ultimately, job losses. The conversation concludes by acknowledging the current normalcy in daily life despite the looming economic challenges and the disparate impact these tariffs will likely have on small businesses compared to larger corporations.
