Is Trump Conning Us About the Economic Impact of His Trade War?

According to data presented by Federal Reserve economists Justin Pierce and Aaron Flaaen in their recently released paper, Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector, the answer appears to be yes, the president is conning us. Again.

Pierce, who holds a doctorate in economics from Georgetown University and Flaaen, who holds a doctorate in economics from University of Michigan, note that the type of increase in tariffs President Trump has levied on foreign imports to boost the economic sector are unprecedented, and for good reason.

According to Pierce and Flaaen, Trump’s trade war with our allies and China and the increase in tariffs on imports hurt manufacturing and cost American jobs. Since last year, they report, manufacturing output “declined noticeably and manufacturing employment growth has stalled.”

The economists also suggest the use of trade war tactics has led to an unintended consequence due to “the rapid expansion of globally interconnected supply chains, in which tariffs can have impacts through channels beyond their traditional effect of limiting import competition.”

All of which adds up to economic measures that were ill-conceived and not thought out. As a result, according to Pierce and Flaaen, they have been especially damaging to U.S. industries including motor vehicles, household appliances, a/v and computer equipment, aluminum sheet, iron and steel. And yet the president continues to insist the tariffs are a boon to American manufacturing.

While I defer to Drs. Pierce and Flaaen on the complexity of economics and its real-world application, an administration that implements major policies and programs without thoroughly thinking them through, including any and all potential unintended consequences, is downright dangerous. And you don’t need a Ph.D. to figure it out.