What economists got wrong about Trump’s tariffs
Economists largely misjudged the impact and scope of Trump’s tariffs, underestimating how they would ripple through supply chains and consumer prices while underappreciating political leverage and bargaining effects in trade talks.
The policy changes led to broader economic distortions, prompting retaliation and sector-specific adjustments that eroded gains in some industries and shifted costs to consumers, with noticeable effects on investment decisions and long-term growth uncertainty.
Three key lessons emerge: tariffs can amplify inflationary pressures and economic volatility; political objectives can drive tariff use beyond pure efficiency gains; and the effectiveness of tariffs hinges on how they are implemented within a larger, multi-laceted trade strategy.