Trying to make a somewhat difficult analytic point on TV: A tariff-induced inflation is different, and more painful, than most other sources of inflation. When tariffs cause prices to rise, there's no reason to expect wages to follow.

A carefully guarded secret is that Biden had the highest real wages (purchasing power) on average among the last 11 presidents. Despite inflation, purchasing power got stronger because wages grew faster vs. pre-pandemic.

Dive into the critical issues shaping economic policy, from President-elect Trump’s sweeping tariff proposals to the challenges Texas faces under rising government spending. Now is the time for bold reforms to protect taxpayers and ensure economic freedom thrives.

With genuine respect, you didn’t really make the point. You asserted, but didn’t explain why this is the case. It’s not self-evident, to me at least. If I’m a widget factory, why does it matter to me if my input costs rise due to tariffs vs. a more “natural” cause?

There is no reason to think that production and manufacturing will not rise to fill the gap that the increased costs of imported goods create. Nor other export markets cannot be created to fill the gap for existing exports. It takes time to normalize but it happens after every trade agreement.

Because it is a TAX. The money isn't just disappearing. The government then gets revenue which it uses to finance the government. This is the same as a sales tax or even an income tax which reduces our actual purchasing power. You have to finance your government.

Absolutely loving these explainers you’ve been sharing from your various TV appearances, Justin. Also, bring back the podcast with Betsy!

How about a reason of rising domestic production -> demand for labor?

Low wages and high costs? Yeah, the late 70’s were awesome. Leads to stagflation. For workers, it’s like monetary quicksand.

Justin, you are so very good at explaining economics. Thank you.

Wages haven’t gone up in practically forever, bruv.

Obviously, Trump's tariffs are bound to cause some inflation. That may be more than offset with rental and housing prices going down due to a large number of migrants being deported, reduction in the size of the government, and cutting wasteful spending in general.