Economist Wolfers: Trump's new tariffs are 'same rotten policy' in a new wrapper

Published Jul 25, 06:00 PM UTC

The Trump administration announced sweeping new tariffs of 10% to 12.5% on 60 trading partners, covering over 80 countries including the EU, to replace expiring temporary duties. The new measures rely on Section 301 investigation powers focused on forced-labor enforcement, replacing earlier emergency-style tariffs struck down by the Supreme Court. University of Michigan economist Justin Wolfers warned that while the new legal framework may survive judicial scrutiny, the policy represents 'same rotten policy' that will fail American consumers and trading partners. Wolfers criticized the 2.5 percentage point differential between compliant and non-compliant countries as a 'rounding error' that destroys U.S. leverage. He concluded the trade war has 'better lawyers, but worse economics,' leading to higher prices for Americans. Markets showed modest gains in 2026, with the S&P 500 up 8.02% year-to-date.