Late Wednesday night, Purdue University economist Anson Soderbery began receiving emails from friends informing him that the Trump administration had cited his research to justify sweeping new tariffs. But Soderbery was baffled—his study actually argued against such trade policies.
He wasn’t alone. Multiple economists expressed concern or confusion over how their research was used to support what they see as overly simplistic and misguided tariff measures. The administration claims the tariffs are “reciprocal,” but instead of directly matching foreign tariffs, they used a basic formula: halving the ratio of each country’s trade surplus with the U.S. to its exports. This led to high, flat-rate tariffs, such as a 46% tariff on Vietnamese goods.
The method wasn’t explained until late Wednesday, after online analysts had already figured it out—and criticized it. Trump officials later said their formula considered complex factors like consumer prices and demand shifts, though many experts still called the approach crude and misleading.
Some economists, like Harvard’s Alberto Cavallo and others from Michigan and Texas, publicly disagreed with how their work was interpreted. One even noted the White House’s conclusions should’ve led to far smaller tariffs. Others pointed out that trade is too interconnected for one-size-fits-all formulas to work globally.
In the end, many economists argue that the real issue isn’t the math—it’s the flawed goal of eliminating bilateral trade deficits altogether. As Harvard’s Jason Furman said, it’s “a somewhat wrong answer to the completely wrong question.”
Soderbery summed up the frustration: “If trade imbalances are going to guide policy, we should at least have a serious, informed discussion about how to address them properly.”OEXN: White House uses economists’ work to back tariffs — but they disagree
Late Wednesday night, Purdue University economist Anson Soderbery began receiving emails from friends informing him that the Trump administration had cited his research to justify sweeping new tariffs. But Soderbery was baffled—his study actually argued against such trade policies.
He wasn’t alone. Multiple economists expressed concern or confusion over how their research was used to support what they see as overly simplistic and misguided tariff measures. The administration claims the tariffs are “reciprocal,” but instead of directly matching foreign tariffs, they used a basic formula: halving the ratio of each country’s trade surplus with the U.S. to its exports. This led to high, flat-rate tariffs, such as a 46% tariff on Vietnamese goods.
The method wasn’t explained until late Wednesday, after online analysts had already figured it out—and criticized it. Trump officials later said their formula considered complex factors like consumer prices and demand shifts, though many experts still called the approach crude and misleading.
Some economists, like Harvard’s Alberto Cavallo and others from Michigan and Texas, publicly disagreed with how their work was interpreted. One even noted the White House’s conclusions should’ve led to far smaller tariffs. Others pointed out that trade is too interconnected for one-size-fits-all formulas to work globally.
In the end, many economists argue that the real issue isn’t the math—it’s the flawed goal of eliminating bilateral trade deficits altogether. As Harvard’s Jason Furman said, it’s “a somewhat wrong answer to the completely wrong question.”
Soderbery summed up the frustration: “If trade imbalances are going to guide policy, we should at least have a serious, informed discussion about how to address them properly.”Publication date:
2025-04-07 13:59:37 (GMT)
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