A leading economist expressed disbelief upon discovering that the Trump administration had cited his academic research to validate its steep new tariffs—saying officials severely misinterpreted his work and drastically overstated the proper tariff rates for each country.
Brent Neiman, a professor at the University of Chicago, wrote in an op-ed for the New York Times that if his study had been correctly applied, the Trump administration’s tariffs would have been approximately a quarter of their current size.
Neiman, who collaborated with three other prominent economists on the paper, said he was immediately puzzled by how the administration arrived at such aggressive tariff levels.
“How on earth did it calculate such huge rates?” was the first question that came to his mind, he recalled.
“The next day it got personal. The Office of the U.S. Trade Representative released its methodology and cited an academic paper produced by four economists, including me, seemingly in support of its numbers,” he wrote.
“But it got it wrong. Very wrong,” he said.
“I disagree fundamentally with the government’s trade policy and approach. But even taking it at face value, our findings suggest the calculated tariffs should be dramatically smaller — perhaps one-fourth as large.”
Neiman, who also previously held a position at the U.S. Treasury during the Biden administration, argued that the Trump team appeared to use an incorrect figure—25%—in their tariff calculation formula.
“Where does 25% come from? Is it related to our work? I don’t know,” he wrote.
“Had the trade office instead used a value closer to the 95 percent number from our work, as I believe it should have done, the computed tariffs would have been as little as one-fourth of what they are.”
He went on to argue that the administration’s gravest error was using his team’s research to set reciprocal tariffs aimed at wiping out America’s trade deficits with individual countries.
“The office said it calculated its reciprocal tariffs at a level that would theoretically eliminate trade deficits with ‘each of our trading partners,’ one by one. Is that a reasonable goal?” he wrote.
“It is not. Trade imbalances between two countries can emerge for many reasons that have nothing to do with protectionism. Americans spend more on clothing made in Sri Lanka than Sri Lankans spend on American pharmaceuticals and gas turbines. So what? That pattern reflects differences in natural resources, comparative advantage and development levels.”
“The deficit numbers don’t suggest, let alone prove, unfair competition,” he added.
Neiman’s critique followed Trump’s announcement last week of a sweeping 10% baseline tariff on all imports, alongside elevated tariffs targeting specific nations and industries—ranging from luxury Italian coffee to Japanese whisky and sports gear manufactured in Asia.
Trump has defended the broad tariffs by framing them as a direct response to what he views as unjust foreign duties and regulatory hurdles placed on American exports.
He’s also maintained that the policy will help rejuvenate domestic manufacturing and bring more jobs back to the United States.
{Matzav.com}