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 a new set of tariffs ranging from 10% to 12.5% on 60 designated trading partners, covering over 80 countries including the European Union, to replace expiring temporary duties. The new measures rely on Section 301 investigation powers centered on forced-labor enforcement, a shift after previous emergency-style tariffs were struck down by the Supreme Court. University of Michigan economist Justin Wolfers warned that while this latest framework may survive judicial scrutiny, it represents 'same rotten policy' in a new wrapper and will fail the American people. Wolfers criticized the 2.5 percentage point differential between compliant and non-compliant countries as a 'rounding error' and argued the policy destroys American leverage. He concluded that the trade war features 'better lawyers, but worse economics' and will ultimately lead to higher prices for consumers. The S&P 500 has advanced 8.02% year-to-date as of the article's publication.