Source: Fortune.com
Summary
Morph Costumes, a UK-based company, has been affected by the US tariff policy, which has caused prices to rise by 9% and wiped out most of its profits. The company’s founder, Fraser Smeaton, says that tariffs are not good for investment or the US consumer, and that they push up inflation. Smeaton also notes that China has a 30-year start in clothing production, making it difficult for companies to move production elsewhere. The President’s tariff policy has been chaotic, with tariffs changing from 0% to 20% to 50% and back to 0% before settling at 10%.
Our Reading
The announcement sounds familiar.
Morph Costumes’ experience with tariffs is a prime example of the impact of economic volatility and barriers to trade. Smeaton’s company has been hit with a $3 million duty bill, wiping out most of its profits. The President’s tariff policy has been chaotic, with tariffs changing rapidly. Smeaton notes that China’s expertise in clothing production makes it difficult for companies to move production elsewhere. The impact of tariffs on consumer prices is a concern, with Goldman Sachs estimating that tariff passthrough increased core PCE prices by about 0.7% through January.
Stability is not the President’s strategy.
Author: Evan Null
