Economist Disputes Trump's Tariff Justification, Citing Misinterpretation and Recession Risk

An economist whose work was cited by Donald Trump's team to justify his tariff increases has accused the U.S. government of misinterpreting his research and contributing to a recession. The economist, Pau S Pujolas, an associate professor at McMaster University, co-authored a study referenced by the White House to support the tariffs imposed on other countries.

Pujolas stated that there is a significant disconnect between his study and the actions of the White House, calling it an "outrage." His article, "Trade Deficits in Trade Wars," suggests that in a trade war, the country with a trade deficit may benefit. Steve Miran, the chairman of Trump's council of economic advisors, cited these findings to support Trump's strategy, claiming that tariffs could improve economic outcomes for the U.S.

However, Pujolas has pointed out the differences between his theoretical study and Trump's actual plan. He stated that the tariffs imposed in 2018 were not optimal, and that the current tariffs, which extend beyond China to include the European Union, are likely to result in losses. He also noted that his model, based on pre-Trump data, does not account for unpredictable actions.

Pujolas also highlighted that the benefits of tariffs come at the expense of other countries, and that retaliatory measures can lead to negative outcomes. He is not the only person cited by Trump to criticize the President’s economic policies.

Brett Neiman, a University of Chicago Economics Professor, also criticized the White House's tariff rates, stating that they were significantly overcalculated. He disagreed with the government's trade policy and called for the tariffs to be eliminated.

The tariff hikes led to market declines, and even some of Trump's allies called for a reevaluation of the strategy. Trump dismissed the concerns and threatened to increase import fees further, framing his economic strategy as a "war with the world" to achieve fairer trading conditions for the United States.