A leading U.S. economist was stunned to discover that the Trump administration used his research to back up its controversial tariffs. He quickly pointed out that the White House had misused his formula and got the numbers “very wrong.”
Brett Neiman, a University of Chicago professor and former Treasury official under President Biden, says the Trump administration miscalculated the tariffs placed on imports from almost every country.
In a guest essay for The New York Times, Neiman explained that the tariffs, which ranged from 10% to 50%, were based on faulty assumptions. The U.S. Trade Representative had cited the paper he worked on with three other economists, claiming it supported their aggressive tariff approach. Neiman, however, disagrees strongly.
“It got it wrong. Very wrong. I disagree fundamentally with the government’s trade policy and approach,” Neiman wrote. “Even taking it at face value, our findings suggest the calculated tariffs should be dramatically smaller — perhaps one-fourth as large.”
Neiman’s main criticism is the administration’s focus on reducing the trade deficit, a goal he believes was unrealistic. The White House suggested the tariffs would eliminate the U.S. trade deficit with other countries, but Neiman says this overlooks the complexity of international trade.
“Trade imbalances between two countries can emerge for many reasons that have nothing to do with protectionism,” he explained. He pointed to the U.S. relationship with Sri Lanka, where Americans spend more on Sri Lankan clothing than Sri Lanka spends on U.S. goods like pharmaceuticals and gas turbines. According to Neiman, this isn’t proof of unfair competition, but a natural result of differing resources and economic development.
The economist also criticized the application of tariffs on a country-by-country basis, calling it a misguided strategy that fails to address the broader issues of trade. He warned that such sweeping tariffs could have unintended side effects, including increased demand for imports from other countries and retaliatory measures, all of which could hurt the U.S. economy.
Neiman also took aim at the methodology used to calculate the tariffs. The research he co-authored predicted that tariffs would lead to a 95% price increase on imported goods, but the Trump administration used a much lower figure of just 25%.
“Where does 25 percent come from? Is it related to our work? I don’t know,” Neiman said, adding that the lack of transparency in the calculations was troubling.
Neiman argued that the tariffs should be eliminated entirely. “If that’s not possible,” he said, “the administration should divide its results by four.”
