Hey, experts — admit how you got Trump’s tariffs so wrong

Economists across the political spectrum predicted that President Donald Trump’s trade negotiations would end in disaster.

Now that his Aug. 1 deadline has passed without the sky falling — and with multiple advantageous deals completed — it’s time to seriously reevaluate the flawed arguments the experts made against his strategy.

Many, it turns out, made basic errors in economic reasoning.

On the left, Nobel laureate and Columbia professor Joseph Stiglitz declared in January that Trump’s policy was “very bad for America and for the world,” while University of Michigan economist Justin Wolfers called it “impressively destructive.”

On the right, prominent free-market advocates like George Mason’s Donald Boudreaux also voiced strong opposition.

Yet their arguments against tariffs revealed a fundamental misunderstanding: They decried tariffs as uniquely harmful, while ignoring that the same logic applies to all taxes.

Take the common critique that tariffs, as a tax on trade, reduce trade overall.

Phil Gramm and Larry Summers — one conservative, one liberal — jointly argued that tariffs “distort domestic production” by pushing resources toward less efficient uses.

They warned tariffs would slow economic growth.

That’s true. But every tax, including sales taxes and income taxes, discourages trade, distorts production and reduces growth.

Sales taxes lower consumption.

Income taxes discourage work. Corporate taxes deter investment.

All taxes distort the economy — tariffs are no exception.

Another frequent claim is that tariffs hurt consumers. Again, true — just as all taxes do.

Logically, opposing tariffs simply because they raise prices and reduce growth means we should oppose all taxes.

But unless we abolish government spending — which stands at $7 trillion this year — we need taxes of some kind.

That’s why economists usually argue for minimizing the total economic damage that all taxes cause across the board.

Distortions increase as tax rates do.

Before Trump’s policies, the average US tariff rate stood at just 2.5% — tiny compared to the 43.4% average top personal income tax rate (including federal and state taxes) or the 27.5% average total corporate tax rate.

If we understand a tariff as a tax like any other, higher tariffs could in fact reduce the overall economic burden on American individuals and companies — an outcome that Trump has often touted as his ultimate goal.

It’s unclear whether a 15% tariff is optimal, but it seems apparent now that a 2.5% rate was too low.

Economists also missed how negotiation tactics work.

Trump began with aggressive tariff threats, horrifying many economists — but the results speak for themselves.

The United States has secured deals that dramatically opened foreign markets representing 55% of global GDP.

Even critics have had to acknowledge the shift.

“To avoid worst of Trump tariffs, [the European Union] accepted a lopsided deal,” The Washington Post conceded, while the London-based Financial Times described how the EU “succumbed to Trump’s tariff steamroller.”

“Under the new deal, US goods into Vietnam will not be taxed while Vietnamese exports will face a 20% US tariff,” the South China Morning Post explained — in coverage that described Hanoi’s “optimism” regarding the agreement.

So while the United States is imposing higher tariffs on many imports, other countries lowered or removed their tariffs on American goods, and dropped many of their non-tariff barriers as well.

These are significant wins that economists failed to anticipate, and that few thought remotely possible even six months ago.

Experts also ignored yet another of Trump’s reasons for increasing tariffs: as a means of providing for national defense and global freedom of the seas, costs that Americans have borne for a century.

Ideally, other countries would help pay for these efforts — how about they just send us a check for the share of benefits they are receiving?

But since that’s not about to happen, tariffs may be the only viable alternative.

Trump’s trade policies defied economists’ dire predictions, delivering substantial gains in opening foreign markets to American exports without tanking the US economy.

If tariffs can help lower more damaging taxes while advancing strategic national interests, they deserve a more honest and nuanced evaluation.

At the very least, economists should have the guts to admit they were wrong — and take a hard look at their conventional wisdom.

John R. Lott Jr., president of the Crime Prevention Research Center, is an economist who has held research or teaching positions at the University of Chicago, Wharton Business School, Stanford, Yale and UCLA.