What economists don’t get about Trump’s tariffs
We already knew that most economists are quite bad at economic policy. Unfortunately, foreign policy appears not to be much of a strength either. Indeed, it appears most financial experts may not even know the difference, based on their criticism of Donald Trump’s recent tariff threats against Mexico, Canada and China. Of course, a nation can introduce tariffs to generate revenue, promote domestic production, shift international supply chains and ‘decouple’ itself from an undesirable trading partner. But a nation can also use tariffs as powerful leverage to make other states change their behaviour. That is a negotiating tariff, not an economic one, and it is designed not to minimise potential
