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- Commentators and economists have been weighing in on Trump’s 25% tariffs on Canada and Mexico.
- Economic experts warn tariffs may lead to inflation, increased costs, and geopolitical isolation.
- Here are some of the sharpest analyses we’ve seen about the Trump tariffs.
An overwhelming wave of analysis has followed Trump’s imposition of a 25% tariff on goods from Canada and Mexico, which has been paused, reinstated, and then paused again after just a few days.
Experts in economy and trade have offered a range of comments and concerns about what the tariffs could mean for the United States, citing inflation, increased costs and uncertainty for businesses, and geopolitical isolation.
Here’s some of the best commentary on tariffs since Trump’s inauguration.
Joe Weisenthal, the Odd Lots podcast
The Tariff Announcement That Shocked Financial Markets
The question is do we then see jobs being lost, Particularly because these taxes are a lot more focused on complicated supply chains than was the case back in 2018, that may be a lot more disruptive to the economy and potentially could create unemployment or just fear of unemployment, which would lower demand, and that would then be a disinflation force, but not now — a disinflation force in the future accompanied by significantly lower growth.
Matthew C. Klein, The Overshoot
While every jurisdiction has room for improvement, the US business environment has materially worsened in the past six weeks. Perhaps most striking is not just the actual changes that have been announced, but the volatility and uncertainty around those changes. Discriminatory tariffs on imports from Canada and Mexico are almost uniquely pointless acts of self-harm, for example, but discriminatory tariffs on Canada and Mexico that keep changing are worse. People can adapt to bad policies, but it is impossible to adapt when both the end state and even the direction of travel are unknowable. As Macbeth put it, “If it were done when ’tis done, then ’twere well/It were done quickly”. Instead, the business environment changes on a daily or even hourly basis. In this world, the most rational choice is to hoard and wait.
Noah Smith, independent journalist and commentator on economics
Many people — even some Democrats who are usually skeptical of libertarian arguments — responded to Trump’s chaotic tariff announcement by extolling the benefits of free trade. But after decades of deindustrialization, such purist arguments are unlikely to carry much weight. There’s a general sense that free trade was a sucker’s bet for America, and any ideological blanket denunciation of tariffs is going to run up against that deep reservoir of (somewhat justified) anger.
Heather Long, The Washington Post
The real reason for Trump’s tariffs
Trump has returned to his habit of wielding tariffs for quick wins. But this time he has seemed willing to risk much more. In 2019, he threatened Mexico with 5 percent tariffs before waving them off. Now, it’s 25 percent. It’s no wonder that retailers, home builders, autoworkers, manufacturers, auto industry suppliers, the booze industry and small businesses all urged the president to turn back. The duties would raise prices for Americans, and their scope is immense.
Luis Baldomero-Quintana, economist and professor at the College of William & Mary
Why Trump’s potential tariffs are making business owners anxious
Speaking to Planet Money podcast hosts Wailin Wong and Adrian Ma, Baldomero-Quintana said there will be three ways tariff uncertainties could hit businesses. First in uncertain costs, second in uncertain retaliations, and third in forcing businesses to change how they operate — all of which could hurt sales and global competitiveness.
“So what you can do is before the tariff goes into effect, you go and make a gigantic purchase of inputs for, say, one or two years of production. The issue is it costs money,” said Baldomero-Quintana.
Christopher Tang, professor of business administration at the UCLA Anderson School of Management
The US is burning bridges as China builds relationships
While the US is burning bridges with its protectionist trade policies, China is building bridges with other nations. China has been enhancing its agricultural productivity, advancing AI and technology, strengthening domestic innovation, expanding global trade and investing in Latin America. Despite the US and EU imposing tariffs on Chinese goods, China is leveraging its port investments around the world and its trade relationships with other Brics countries to expand its trade with Southeast Asia, the Middle East, Africa and Latin America. Since the trade war began in 2018, China’s agricultural imports from the US have declined, but trade with Latin America has increased significantly.
John Foley, Financial Times Lex column
This throws companies into a state of grave discombobulation. And I think that what we know about companies is that they like some kind of predictability. And when I’ve been talking to company executives, the story is always the same. It’s like they just want to know what they’re doing. They just wanna know where to put their assets. And that uncertainty is the most damaging thing for companies. It’s not bad for everyone — you know, traders in Wall Street banks love volatility. But the companies themselves are finding it very hard to know what to do. What they are doing is making noises about building stuff in the US: opening car plants, you know, building data centres, whatever it may be.
Phil Gramm, economist and former US Senator
A Letter on Tariffs From Economists to Trump
It is telling that the Trump tariffs implemented in mid-2018 and the Biden expansion of those tariffs didn’t stop the secular decline in manufacturing employment as a percentage of the total labor force. The decline in manufacturing employment as a percentage of total employment is being driven by the same secular forces that caused employment in agriculture during the 20th century to fall from 40% to 2% of the labor force: a vast increase in labor productivity and a decline in the demand for manufactured products relative to services. This is a worldwide phenomenon occurring in both developed and developing countries.
Paul Krugman, Distinguished Professor of Economics at the Graduate Center of the City University of New York
At some level Trump is aware that while he may have claimed victory over last week’s tariff standoff, everyone who actually knows anything thinks he got rolled. So my best guess is that these tariffs are his way of saying “You think I backed down? Well, watch this!” while taking actions that look big to the uninformed but not so much to people who can crunch the numbers. It’s also becoming hard to avoid the sense that Trump has developed a particular animus against Canada. I don’t know why he started floating the idea of annexing our neighbor, but the fierce pushback from the Canadians themselves and the ridicule he has received at home seems to have made him even more obsessive on the topic. And this may in part explain his decision to make Canada the biggest target of his mini trade war.
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