Tariffs: Let’s look at the impact so far

I thought I would revisit the tariffs and prices since there have been quite a few protests and irate town halls. What are people protesting? Well, three comes to mind: 1) DOGE cutting essential services that people use; 2) the deportation without due process; and 3) tariffs.

The topic of prices has not been specifically spelled out, but I think it is implied in the tariff discussions.

I think it is too soon for tariffs to making its impact known despite a few articles implying anger about tariffs. It should take time for tariffs’ impact to flow through the economic system.

I am thinking about what happened during COVID when shipping got disrupted. Inflation did not appear immediately.

My understanding of tariffs

I am not an economic expert, so my understanding of tariffs stems from what I learned in history, namely the history of the Great Depression. Specifically, the Smoot Hawley tariffs of 1930s seem to have deepened and lengthened the Great Depression.

Adding tariffs to import has the effect of taxing the consumers because the foreign countries does NOT pay the tariffs. It is the importing companies that pay the tariffs and then turn around and charge the consumers. The unfortunate effect is that a lot of goods see a decline in purchases.

Some companies can go bankrupt if consumers stop buying.

That appears to be the lesson everyone – from historians to economists – pulled from that era.

Price data: Eggs

Well, I wasn’t going to look at the prices of eggs, milk and gas but with the tariffs going on, I am going to see what the latest prices are. Again, I think it is too soon for tariffs to take effect on goods and services and maybe eggs and milk may not be the ones impacted.

First up are eggs since 2012. You can see that eggs are skyrocketing but they have been skyrocketing since end of 2023 due to bird flu. If tariffs do play a role, I will have difficulty determining that as eggs are already exploding through the roof.

This chart shows the history of egg prices since 1980. It has really surged since 2020 – you know, the onset of COVID.

Price Data: Milk

Now, milk is where I start to think neither inflation nor tariffs are playing a role. I am having a hard time seeing inflation here.

Over a longer period of time…it is easier to see inflation in this longer-range chart. But, it started around 2018 and ended its surge around 2022. Tariffs are not playing a role here; something else is. I would have to dig in to see if I can find out what was causing the price increase.

Price Data: Gas

Gas prices could play a role since Canada appears to supply oil for processing, so if crude oil comes in more expensive, then the final processed gasoline correspondingly becomes more expensive.

Right now gasoline seems stable.

Price Data: Steel

I am adding this category in the hopes of capturing any tariffs effect. Steel should be one of those commodities affecting finished products down the road. Right now, prices appear steady except at the end there appears to be a slight uprise. It is too early to tell if tariffs will impact steel prices.

Logically, it should.

Tariffs impact on the stock market

The stock market, and the bond market, are the ones flashing red upon news of tariff imposition. I will admit, I did have some difficulty discerning the drops.

The source of the data came from Microsoft’s function STOCKHISTORY and I am showing the Close prices of the stock indexes.

Dow Jones

The Dow Jones was the easiest to discern how investors received the news of tariffs.

Here’s a shorter range in the hopes of seeing greater detail. That dramatic drop took place on April 2nd, “Independence Day” and then rebounded upon delay of certain tariffs.

NASDAQ

This is harder to see but at the end, the drop appears.

Let’s look at it closer to see if we can see the details. Here, the evidence is … non-existent?

S&P 500

And lastly, we have the S&P 500. Again, not so clear although we do see a drop off at the end.

Let’s look a little closer. We do see that drop off and then the rebound, which coincides with the news reporting.

Tariff story to be continued.

We’ll have to track the tariff story as time continues to see what kind of impact on prices and on the citizens.

Right now I don’t believe the people are protesting the tariffs; it’s too soon. If they are, I believe that they are the Democrats, the liberals, the lefties, or whatever you want to call them. If they are Republicans, they need to wear their red hats so that Congresspeople will realize that the tariffs are hurting their conservatives. The conservatives have their Congresspeople well trained to follow whatever their wishes are so if conservatives want action from their Congressional officials, they need to wear their red hats.

This may be history in the making and not in a good way.