Kyle Meng
@kyle_c_meng
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Associate prof @brenucsb @EconomicsUcsb. Climate & Energy Director @emLabUCSB. Fmr Senior Climate Economist @WhiteHouseCEA
Joined August 2019
Today is my last day as Senior Climate Economist @WhiteHouseCEA. It has been the privilege of my career to serve my country with such dedicated & talented USG colleagues on all things climate, energy, & environment. Now back to @BrenUCSB @EconomicsUcsb @emLabUCSB @ucsantabarbara!
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I write in today's Briefing Book how Trump tariffs have misfired economically & geopolitically. Trade modeling shows Trump tariffs to date would raise US prices 5.4% and lower US real income 0.8%. And they hurt Canada and Mexico far more than China. https://t.co/Uj62qIzU7l
briefingbook.info
Trump tariffs will raise U.S. prices by 5.4% and lower real income by 0.8%. They hurt close U.S. allies much more than the Chinese economy.
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Aggregate US prices rise by 5%. Sectors with >8% US price increase are metals, clothing, electronics, food, chemicals, and other industrial products. /n
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US imports from PRC fall by 82%, but still >10% drop from Canada, Mexico, Japan, and S. Korea because of 10% universal + 25% sectoral tariffs. US and Mexico GDP fall by 0.8%, followed by drop of 0.5% in Canada and 0.3% in PRC. 2/
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Latest rapid GE trade modeling run: 145% PRC tariffs, 10% universal tariffs, 25% steel/alum/cars tariffs, 84% PRC retaliation Headline: US GDP falls 0.8%, US prices rise 5%, $220B revenue What are country & sectoral outcomes? 🧵 1/
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(/n) Details: Multisector Armington model w/ linear production & fixed sectoral expenditures shares based on @TradeDiversion PhD notes. 2022 trade matrices from Comtrade, processed in Exiobase 3.0, global coverage and ~200 products. Trade elasticities: Ossa (JIE 2015).
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(5) Finally revenue. Annual US revenue from tariff around $600 billion. It's a big number for a big tax on US households. More details on this modeling work soon in an upcoming blog @CSIS
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(4) Let's dive deeper into price increases in the US. Left shows distribution of US price increases by sector. Right shows sectors with the highest increases. Note lots of intermediate goods (we don't model input-output linkages).
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(3) What about country prices and GDP? Prices fall everywhere except for the US, where the average price increase is 9.5%. GDP falls in most places with US GDP decreasing by 1%.
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(2) What happens to US imports? Country-level change in US imports correlated with tariff. We see large 20-40% drops. But some countries/regions with low or zero tariffs (e.g., Russia) will import more to the US.
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(1) Rapid GE trade modeling returns for April 2nd tariffs. We model: April 2 tariffs + 25% on CAN/MEX imports + 20% on PRC imports + 25% on iron/steel/alum/cars. Fig. shows total tariff by country. Avg 20.4%, ~10X pre-Trump rates. What are US and foreign impacts?
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Details: -Multisector Armington model with linear production and fixed sectoral expenditures shares based on @TradeDiversion PhD lecture notes. -2022 global trade matrices from Comrade, processed in Exiobase 3.0, ~200 products. -Trade elasticities: Ossa (JIE 2015). 3/3
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Model solves for new U.S. consumer prices for all products. Here are products with US price increases >2%, up to 13%. Lots of industrial inputs & food products, unsurprisingly given CAN/MEX/PRC imports. 2/3
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Lots of takes on new Trump tariffs. Here's a quick general equilibrium analysis. Grabbed off-the-self quantitative trade model calibrated to '22 global trade flows. Fed in 25% MEX, 25% CAN, and 10% PRC tariffs across sectors. What happens to U.S. consumer prices? 1/3
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New @WhiteHouseCEA blog: almost all US planned new electricity capacity in 2024 is zero carbon. Why this is important and what it means ⬇️
Our CEA blog today highlights a remarkable recent announcement from @EIA: For the first time since the mid-20thcentury, more than 95 percent of this year’s U.S. planned new electricity capacity is zero-carbon! 1/ https://t.co/zqWm803rdS
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A thread on @WhiteHouseCEA’s climate chapter:
The clean energy transition is under way, creating an innovative U.S. economy powered by cheap, reliable, and secure clean energy. This transition will address the climate crisis and provide new sources of economic growth, employment, and prosperity. 1/
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Presenting the 2024 Economic Report of the President from @econjared46 and the @WhiteHouseCEA!
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Climate chapter ERP thread, from my @WhiteHouseCEA partner in crime.
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ERP is out! Check out the climate chapter.
Today, the Council of Economic Advisers under the leadership of @econjared46 released the 2024 Economic Report of the President. https://t.co/itnv85Swti
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Today, the CEA published a blog describing recent trends in semiconductor manufacturing employment and how funding and incentives created by President Biden’s CHIPS and Science Act are likely to spur continued growth in the sector. https://t.co/hm24iNfzqA
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