Why Trump Tariffs On Mexico, Canada Would Push Core Inflation 1.4% Higher

With markets so far taking in stride the news that Trump has pledged a hike in tariffs to the "NAFTA neighbors", it seems apt to rehash a two-month old analysis from Deutsche Bank’s Justin Weidner and Matt Luzzetti, who highlighted back in late November that 25% tariffs on Mexico and Canada could add around one percentage point to 2025 core PCE.