Confirmed: Uncertainty about Trade Policy Rises

From Baker, Bloom and Davis, as well as Caldara et al., in the wake of Section 232 (“National Security”) tariffs on bathroom vanities, upholstered furniture, and some pharmaceuticals.

Figure 1: EPU-trade from Baker, Bloom and Davis (blue, left scale), and Trade Policy Uncertainty from Caldara et al. (red, right scale). Source: policyuncertainty.com and Iacoviello.com.

If you’re wondering how bathroom vanities productive capacity is central to US national security, I have no answer for you; nor does the Commerce Department’s BIS.