President Donald Trump on Sunday claimed that a “dividend of at least $2000 a person” will be paid to all Americans except for “high-income people,” saying the country is now wealthy as a result of his tariff policies.
“People that are against Tariffs are FOOLS! We are now the Richest, Most Respected Country In the World, With Almost No Inflation, and A Record Stock Market Price. 401k’s are Highest EVER,” the president wrote.
Why weren’t the tariffs to raise this money deflationary?
Because the tarrifs end up is the cost of goods, which is counted as part of their price when calculating inflation.
If you subtract the direct effect of tarrifs on price, you’ll find that they were deflationary.
Theoretically, the money should be staying in the economy so the supply of USD in circulation wouldn’t change. But since nobody really knows where that money is going, it’s hard to know. I’m not an expert though so I could be wrong.