US economist says White House got his tariff research 'all wrong'

WASHINGTON: An economist whose work was cited by US President Donald Trump’s administration to justify sweeping tariffs has said officials misinterpreted the research — and the levies should have been as little as a quarter of what the White House announced.

Brent Neiman, who was a US Treasury official under previous president Joe Biden, co-authored a 2021 paper on the impact of tariffs on prices in the United States.

The paper was cited by the US Trade Representative (USTR) in a statement released last week explaining the calculations behind the major import tariffs announced by Trump that threaten to pull the global economy into a recession.

“I disagree fundamentally with the government’s trade policy and approach,” Neiman wrote in an opinion essay published by The New York Times on Monday.

Neiman said the USTR’s “biggest mistake” was misconstruing trade deficits with other countries as a definite sign of unfair practices by the other party.

Additionally, the Trump administration miscited the paper to suggest that domestic prices would only rise slightly under the new tariff regime, Neiman said in the essay, which ran with a headline saying the White House’s use of the research “got it all wrong.”

The economist said his work, which was produced with three other academics, showed that “the price paid for U.S. imports would rise almost as much as the tariff rate.”

Their findings also suggested the “calculated tariffs should be dramatically smaller — perhaps one-fourth as large.”

Trump’s trade math has left economists scratching their heads, with former Treasury Secretary Larry Summers saying last week “this is to economics what creationism is to biology, astrology is to astronomy.”

The USTR published a formula with Greek letters last week to justify the levies which did not include other countries’ tariff levels in its determination that Washington was treated unfairly.

Several of Trump’s fellow Republicans have begun expressing dissent against his trade war, concerned about its potential to trigger a serious recession.

Bill Ackman, a billionaire hedge fund investor and one of Trump’s most prominent cheerleaders, warned at the weekend that the United States was “heading for a self-induced, economic nuclear winter.”