TRUMP'S TARIFF TROUBLE

The delayed fallout of U.S. trade policy

- BY ROBERT LAWRENCE

ON THE CAMPAIGN TRAIL, PRESIDENT DONALD Trump made lofty claims about the benefits of raising tariffs. They will reshore American manufacturing jobs and encourage domestic spending, he promised. “Tariffs are the greatest thing ever invented,” he declared. Virtually no experts agreed, projecting that Trump’s tariffs would raise inflation, cut wages, impose an additional drag on U.S. manufacturers, and weaken the stock market. Many economists issued warnings about a recession at home and the decline of globalization abroad.

Yet almost a year on, the global economy has not tanked, raising the question: Was Trump right? In my view, it’s not that tariffs are not damaging but rather, their effects are being stretched over a longer period of time. Negative consequences are currently being offset by low levels of retaliation and high levels of AI investment.