[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  EndGame Macro [@onechancefreedm](/creator/twitter/onechancefreedm) on x 39.6K followers Created: 2025-07-18 01:18:02 UTC What’s happening, in my view, is that foreign exporters especially from overcapacity heavy economies like China and Japan are quietly absorbing the tariff shock through aggressive margin compression. As highlighted, Japanese automakers slashing U.S.-bound prices by XX% and China’s sharp factory deflation aren’t coincidental, they’re strategic. These exporters are trying to defend U.S. market share at all costs, even if it means cannibalizing their own bottom lines in the short term. So instead of U.S. consumers or businesses bearing the brunt, we’re seeing a kind of silent subsidy from abroad. That explains how tariff revenue can surge without a corresponding rise in inflation. But the key question is how long can this last? Goldman’s point that U.S. firms absorbed XXX% of tariff costs initially but are now passing on XX% to consumers and likely more soon is critical. We’re in a temporary holding pattern where the inflationary impact is being delayed, not eliminated. If pass through rises to 60%+ as expected, we could see PCE spike materially by year end, which may force the Fed’s hand and disrupt current market calm. In other words, this isn’t a free lunch. It’s a time delayed cost spiral being cushioned for now by fragile foreign producer margins and a global demand slowdown. So no, tariffs aren’t currently inflationary in the data but that’s not because they aren’t inflationary in theory. It’s because the system is masking their true cost. The durability of that mask is the real macro risk heading into 2026. XXXXXX engagements  **Related Topics** [deflation](/topic/deflation) [$6753t](/topic/$6753t) [tariffs](/topic/tariffs) [japan](/topic/japan) [china](/topic/china) [macro](/topic/macro) [Post Link](https://x.com/onechancefreedm/status/1946016581471125904)
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EndGame Macro @onechancefreedm on x 39.6K followers
Created: 2025-07-18 01:18:02 UTC
What’s happening, in my view, is that foreign exporters especially from overcapacity heavy economies like China and Japan are quietly absorbing the tariff shock through aggressive margin compression. As highlighted, Japanese automakers slashing U.S.-bound prices by XX% and China’s sharp factory deflation aren’t coincidental, they’re strategic. These exporters are trying to defend U.S. market share at all costs, even if it means cannibalizing their own bottom lines in the short term. So instead of U.S. consumers or businesses bearing the brunt, we’re seeing a kind of silent subsidy from abroad. That explains how tariff revenue can surge without a corresponding rise in inflation.
But the key question is how long can this last? Goldman’s point that U.S. firms absorbed XXX% of tariff costs initially but are now passing on XX% to consumers and likely more soon is critical. We’re in a temporary holding pattern where the inflationary impact is being delayed, not eliminated. If pass through rises to 60%+ as expected, we could see PCE spike materially by year end, which may force the Fed’s hand and disrupt current market calm. In other words, this isn’t a free lunch. It’s a time delayed cost spiral being cushioned for now by fragile foreign producer margins and a global demand slowdown.
So no, tariffs aren’t currently inflationary in the data but that’s not because they aren’t inflationary in theory. It’s because the system is masking their true cost. The durability of that mask is the real macro risk heading into 2026.
XXXXXX engagements
