UBS On-Air: Paul Donovan Daily Audio 'Trade taxes and boiling frogs'

Markets have reacted to media reports suggesting that the next US administration will impose trade taxes on US consumers gradually, month by month. Remember past media reports on tariff policy have subsequently been denied over social media. This is a boiling frog approach—the price level effect is the same, but consumers may not notice so much. The risk is that repeated tariff increases would encourage repeated profit-led inflation episodes by providing a convenient cover story.