A Misinterpreted Study Sparks Controversy
The Biden administration recently cited the work of economists Andrés Rodríguez-Clare and Arnaud Costinot to support its proposed 20% tariff on all U.S. imports. However, the economists behind the research have pushed back, saying their work was theoretical and never intended as a policy recommendation. According to them, the White House has misunderstood and misapplied their findings.
Economists Warn: “This Is a Very Bad Idea”
Rodríguez-Clare and Costinot argue that while their models suggest tariffs could yield small gains under ideal conditions, applying a blanket 20% tariff in the real world would likely backfire. They fear the policy could provoke trade retaliation from U.S. partners, weaken global supply chains, and ultimately raise costs for American consumers. Their message is clear: the risks far outweigh the hypothetical benefits.
A History of Bipartisan Resistance to Tariffs
This is not the first time leading economists have spoken out against protectionist policies. In 2017, a bipartisan group of every living former chair of the White House Council of Economic Advisers warned that steel tariffs would harm the U.S. economy. Their concerns proved valid, as past tariff hikes have often led to higher prices, trade friction, and weakened economic performance.
Policy vs. Theory: The Economic Disconnect
The controversy highlights a growing tension between economic theory and real-world policymaking. Academic studies often explore theoretical scenarios that assume perfect conditions, which rarely translate into effective policy in practice. Experts believe the administration’s move risks using complex models as political justification, while ignoring the nuances, assumptions, and caveats that come with them.
A Growing Call for Trade Diplomacy
Many economists are calling for a return to diplomacy and market cooperation rather than blanket tariffs. They argue that global challenges like inflation, supply chain instability, and labor disruptions are better addressed through multilateral agreements and strategic partnerships. Tariffs, they warn, are a blunt tool that could further isolate the U.S. from its allies and trading partners.
Conclusion
The White House’s attempt to justify sweeping tariffs using academic research has backfired, with the economists themselves disavowing the move. As economic leaders across the spectrum voice concern, the administration faces mounting pressure to reevaluate its trade strategy. With inflation still looming and global tensions rising, the path forward may require more precision—and less protectionism.