US: Trump Advisors May Push For "Calibrated Approach To Tariffs" WSJ

The Wall Street Journal has published a piece arguing that Trump’s tariff agenda is unlikely to be as politically damaging as the price shock during the first half of Biden’s term. 

• WSJ notes: “Early on [in Biden's term], wages lagged behind inflation, eating away at purchasing power. But even once wages caught up, the psychological damage remained.
• “That psychological toll might be why voters rated their state’s economy well but the country’s poorly. Inflation, like illegal immigration, fed into a sense of national disorder, for which blame naturally fell more on the president than local leaders. This might help explain why congressional Democrats escaped a shellacking in the 2022 midterms and outperformed Harris last week.”
• On the risk of similar blowback for Trump's agenda: “Trump needs to guard against the inflationary consequences of his own policies. Economists think his tariff plan, if fully implemented (which is far from a certainty), could raise consumer prices about 1%. That is nothing like the 21% of the past four years, but it’s the wrong direction.
• “Trump’s Wall Street advisers know this, and as a result, they might press for a calibrated approach to tariffs. In his first term, Trump exempted sensitive products, such as those made by Apple. Expect similar exemptions now—perhaps for food and fuel. Markets for now appear sanguine.”

Figure 1: Change in Consumer Prices over 48 Months, Four Countries That Experienced Incumbent Electoral Losses