Top Economist Says Trump Admin Got Tariffs 'Very Wrong'

 

Top economist Brent Neiman slams the Trump administration for misusing his research to justify hefty tariffs. Neiman, a University of Chicago economics professor, claims the White House got his formula "very wrong" and grossly miscalculated levies for each country.

What's the Controversy About?

The Trump administration imposed a 10% baseline tariff on all US imports and higher duties on major trading partners, citing "reciprocal" tariffs as a response to duties and non-tariff barriers on US goods. However, Neiman argues that his research was misinterpreted, and the tariffs should be roughly four times lower.

The Miscalculation

Neiman's research suggested using a value closer to 95% in the formula, but the Trump team allegedly used a 25% rate, resulting in inflated tariffs. The professor claims this miscalculation led to tariffs being as high as they are today, instead of being one-fourth of that amount.

Strategic Maneuver or Full-Frontal Assault on China?

Flawed Trade Policy

Neiman criticizes the administration's approach to eliminating trade deficits with major trading partners. He argues that trade imbalances can occur due to various factors unrelated to protectionism, such as differences in natural resources, comparative advantage, and development levels.

Economic Implications

The tariffs imposed by the Trump administration could have significant economic implications, including:

• Increased costs for consumers: Estimated to be around $2,600 per year 
• Inflationary risks: Potential 1.4 to 5.1% rise in consumer prices 
• Impact on manufacturing jobs: Trump's claimed boost in manufacturing jobs is disputed by economists

Neiman's reaction highlights the ongoing debate about the effectiveness and consequences of the Trump administration's trade policies.

Additional

"The origin of the 25% figure remains unclear, and its connection to our research is uncertain," Prof. Neiman stated, expressing concern over the far-reaching consequences of the reciprocal tariffs on global workers, businesses, consumers, and financial markets.

The renowned economist said the tariffs should be scrapped entirely

The White House cited these economists to justify its tariffs

Given the lack of transparency in the methodology, Prof. Neiman advocates for a complete overhaul of the tariffs. As a more feasible alternative, he suggests that the administration should significantly scale back its results, effectively reducing them to a quarter of their current magnitude.