IVOL - Have shadows of the trade war compounded inflation risks?
Economists are already debating whether, or to what degree, stimulus spending is fueling inflation, with consumer prices rising by a whopping 4.2% in April. Prices of lumber, steel and semiconductors are also at record highs, given historically low inventories and surging demand. Port congestion and rising freight costs are meanwhile adding to price pressures amid a scarcity of shipping containers, as well as dwindling warehouse space.Another culprit? Some businesses are pointing fingers at the import tariffs that were first implemented by the Trump administration and kept in place under President Biden. The levies were initially intended to shield American firms from a flood of cheap imported products from China, though some manufacturers say they make their companies less competitive at a time of red-hot domestic demand. Tariffs are paid to the U.S. government by importers, which look to manage the duties in several ways, including discounts, alternative sourcing, lower profit
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Have shadows of the trade war compounded inflation risks?