causal
Tariffs Offset By Exchange Rate Adjustment
A broad tariff is largely offset by exchange rate adjustment: a 20% tariff on the whole world makes the dollar appreciate roughly 10%, which brings the cost of foreign goods back up only by the net amount and makes your exports more expensive, rebalancing everything—and retaliation tends to cancel out the rest of the effect.
causalpending
Speaker
Kenneth RogoffEvidence Quote
“If you did 20 percent tariff on the whole world, to a first approximation, your exchange rate goes up 10 percent the dollar and that rebalances everything. That brings the cost of their goods back to just the 10 percent rise”
Created: 6/13/2026, 3:28:48 AM
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