If you watched the video I shared above, it's the U.S treasury secretary Scott Bessent who before Congress basically told them he was very well mistaken about tariffs. At one time, he thought they were going to have huge impacts on prices going unreasonably high. Now he's calling it a dog that didn't bark.
That comment he passed meant that the catastrophe that everyone thought was going to start happening, never happened.
He's saying how the tariffs we imposed didn't create the inflation mess that so many people predicted. The economy has continued to grow and to my surprise, sometimes the prices have actually calmed down a little bit. That looks strange to me, but maybe I'm just not thinking about it right.
Now Bessent looks at tariffs as not just a bad tax that creates higher costs for consumers, but as something that supports manufacturers in the US and helps keep jobs in the United States. According to him, tariffs help lessen their dependence on other nations. But I'm not totally convinced.
Did tariffs lessen inflation from what it would have been without them or were there other things in the economy that offset the effects of tariffs? I can't tell you which is which.
Also look just how fast the narrative has changed on tariffs. Last year they were the big evil villains and this year they are now a source of protection for manufacturers. This should make you think about what other things we will eventually come to realize we've gotten incorrect during this time frame, which makes the future seem less concrete than most people are willing to admit.
One thing that should be kept in mind is that although Bessent says prices are calming down, some of the data being collected by the government, like the Producer Price Index for the end of 2025, shows that they actually went up by a small amount. So there wasn't a disaster but some will still feel the impact.
