No. of Recommendations: 2
For all but purely inelastic goods, both consumers and producers will bear some of the cost of the tariff.
I would argue that cell phones are pretty inelastic. And there aren't a lot of choices for producers of microchips and other electronics. So they're pretty inelastic as well.
I also pointed Michael to microeconomics in an earlier post to gain an understanding of the details.
But more generally, a significant tariff on virtually everything imported from China--which is my understanding of Trump's proposal--would cause disastrous effects on the US economy. I went into that up thread, but it would almost certainly cause significant inflation in consumer goods, with no corresponding inflation of wages.
--Peter
