'Pattern of dishonesty': Economist slams Trump's 'shifting rationale' on tariffs
President Donald Trump is not being honest with Americans about his trade policies, according to one economist.
Trump has sought to reshape global trade by imposing significant tariffs on America's trading partners, such as South Korea and Japan. Some experts have argued that Trump's tariffs are being used as a way to achieve negotiating leverage.
Justin Wolfers, professor of public policy and economics at the University of Michigan, told Sam Seder on his show "Majority Report" on Sunday that Trump's approach to tariffs is built on a "pattern of dishonesty."
Wolfers explained that Trump's tariff policy appears to have confused trade barriers with trade deficits. Trade barriers can occur for reasons other than tariffs, such as a product not meeting the needs of another country's consumers, or it doesn't pass regulatory inspections. Trade deficits, on the other hand, measure the relative value of a country's imports and exports.
America's almost nonexistent car sales to Japan are an example of a trade barrier, Wolfers argued, because American cars don't meet the country's emissions levels or the safety standards.
Wolfers added that all countries place tariffs on "politically important" items, and many had lowered their tariffs to between 1% and 3% by the end of 2024.
"Trump hasn't yet gotten anyone to give up on the politically important stuff," Wolfers said.
Wolfers also argued that Trump's "shifting rationale" on tariffs is "more incoherent" than some think. He listed reasons Trump has given for the tariffs, such as ending illegal immigration from Canada, addressing the fentanyl crisis, and growing America's manufacturing industry.
While some of these ideas could work in theory, Wolfers added that the tariffs have little practical value for the president to achieve these ends.
For instance, Trump threatened to impose an additional tariff on Spain after it refused to increase its NATO defense spending. However, Spain is part of the European Union, which makes it impossible to impose such tariffs. That prevents Trump from meeting his goal of getting all NATO countries to spend at least 5% of their GDP on defense.
Trump's budget bill provides an example of how counterintuitive the administration's tariff policies appear to be for the American consumer, Wolfers argued.
"What they've done is give tax breaks to the rich, while the tariffs are going to be paid for by middle-class consumers," Wolfers said.