Trade policy as a macro variable

Tariffs aren't a step change — they're a continuous band. A 10% MFN is rounding error; a 60% MFN is a different regime. Read with supply-chain reshoring and the bipartisan continuity of the tool kit (Section 301, IRA, CHIPS, export controls), trade policy is a durable macro variable, not an episode.

The headline story ("tariffs are political theatre") is half right and half misleading. The dial moves CPI, capex, and bloc alignment in ways the "average effective rate" number hides. Treating each headline as a one-off misses the structural shift; the shift is in the tools both parties now use as a matter of course.

0–10% tariff band

noise

10–25% tariff band

signal

25–60% tariff band

regime change

Industrial-policy subsidy

capex floor

Export controls

bloc-defining