The theme duties He dominates all the newspaper pages: on the agenda new rates on this or that good, which they break the global balancesnot only from a commercial point of view, but also from a political and diplomatic point of view. Beyond the repercussions in the political field, what is pressed is to understand which influence the duties they will have on the economy and in particular on inflation, since this factor will direct the Future choices of central banks.
Paul DonovanChief Economist by Ubs Global Wealth Management, analyzes eight ways in which duties can influence inflation.
What the analysis of the inflationary impact depends on
To evaluate the extent of the inflationary damageinvestors must place qU.: How perceptible the effects are of the duties for the consumer and how much is they likely to remain in force? To what extent the tariff variation will have implications directly on the consumer? How significant will be secondary effects of the duties? How quickly exporters can adapt To help their foreign customers avoid paying duties? None of these effects is constant over time, and the secondary effects of the duties seem to be particularly uncertain.
The role of inflation expectations
It is also worth noting – explains the UBS expert – that uncertainty On the imposition of dice it can have In itself an inflationary effecteven if the rates are not actually imposed. For example, companies could push for price increases that go beyond the only costs of costsif they believe that rates can go beyond the normal price cycle. Furthermore, The accumulation of goods in anticipation of possible duties could raise costs warehouse, creating pressure on the offer and transport and further increasing costs. Finally, tariff uncertainty could discourage investments, which could delay any efficiency of efficiency.
UBS conclusions: impact yes, but limited
Paul Donovan reports that the current proposal of the United States will probably compensate for the disinflation forces consolidated in the country and could create a significantly higher inflation. According to UBS, it is unlikely to be a two -digit inflationsince the negative consequences on the growth of an increase in duties (as for any other tax increase) will slow down the pressure on prices over time.
