Photo: Getty Images North America
The mainstream media continues to claim that American consumers are going to wind up paying for Trump’s tariffs, but in April, the producer price index actually fell by 0.5%. So what’s going on here? In short, it looks like companies are eating the costs.
According to financial planner Richard Rosso, many businesses have realized it’s better to take a hit to their margins rather than price out consumers. He said, "They’re saying, ‘You know, maybe we need to eat some of these prices, and we can’t pass them to consumers.’ And that’s what you see in the producer price index."
Despite many left-wing pundits predicting prices would rise in April, they actually fell across a majority of sectors. Core PPI, which excludes food, energy, and trade services, actually dipped by 0.1%, the first monthly decline in the last five years.
Rosso added that the fact that companies are willing to bear the cost of tariffs indicates they’re confident Trump will be able to cut deals quickly. He said, "It’s all based on the tenet that this is all going to be fixed real quick. Or at least in a quicker manner, and maybe we don’t even have to worry that this is going to be inflationary."