Austan Goolsbee

I said imported goods are only 11% of GDP in the United States.

Even substantial tariffs, as long as they stay in their lane, they might not have that material of an impact on the US economy.

Like in 2018, we had tariffs, but overall inflation didn't go up that much.

If you jump out of the lane, and how it would jump out of the lane would be if you start applying the tariffs to intermediate goods so that it becomes a tax on domestic production, not just on imported goods, but on the components and supplies that go into US cars, for example, now it's going to be bigger.

If there's retaliation, now you're going to have to deal with some of those issues.

If there are spillovers like we saw in COVID where they disrupt the supply chain for computer chips, that affects cars, cars affects FedEx, FedEx affects retailers who are shipping stuff, you can get that trickle-down kind of effect.

But I think the overall forecasts have proved pretty accurate for what the size of the tariffs ended up being.

Okay, remember...

When the backlash began, they began exempting a bunch of stuff.

So anything that was USMCA compliant, oh, no tariffs on that.

The rates came down a bit.

I think it added about one full percentage point to the inflation rate.

And that was sort of the estimate at the beginning.

And I think that basically played out.

If you looked at the, let's call it the 10 to 12 months before inflation,

Liberation Day, I believe core inflation was only a tiny bit above 2% in that period.

You have one blip in January for reasons we can argue about because it seems to happen every January.

So we got to think how to do that.

But I think we were making progress.

I got to do it this way for you.