Stephen Miran

And so you've got a Japanese or German exporter selling to the United States, but the exports are bought by U.S.

subsidiary of them.

So Mitsubishi Japan or whoever is selling to Mitsubishi U.S.

or whoever, right?

And then if this is the case, then what winds up happening is that the incidence ends up falling on the importer of record without necessarily pushing a decline down in import prices.

And so I'm not exactly sure on the magnitude of this channel yet.

It's something that I'm looking into, but it is a possible disruptor of that argument.

But in any case, for sure what we're seeing is not a broad-based increase in consumer inflation as a result of tariffs.

Well, look, reforms to the Federal Reserve, to the structure of the Federal Reserve, are ultimately an issue for Congress to take up and not one for me to address.

But...

I do see part of my job as bringing fresh and out of consensus ideas to what can be, at times, a settled way of thinking.

And that's what I'm going to continue doing.

And so, for example, you think about

and whether they're causing inflation or not.

I think there's an attitude among a lot of people, which is that the correct counterfactual for thinking about tariffs is to compare them to pre-trends for what was the trend in those goods before the pandemic, right?

To me, that's the wrong counterfactual because there was so much else different about the structure of the economy when you look at long-term trends before the pandemic.

They include, you know,

You look at 20-year trends before the pandemic, which is what a lot of people do, it includes the entry of China into the WTO and shipping deflation to the entire world.

Is that the correct counterfactual for thinking about the impact of tariffs on the economy today if we're not experiencing the same deflation we experienced in 2004 in goods when China had just entered the WTO?

and then attributing all excess inflation relative to that pre-trend to tariffs, I think that's the wrong counterfactual.