April 16 Meeting: Will Tariffs Sink the World Economy?

 

The "Liberation Day" wave of tariffs announced on April 2 by the Trump administration have hit financial markets like a ton of bricks. It will take time to see their full effects, but meanwhile, here are some of the many questions they raise:

• Is balanced trade a norm to which we should always aspire? Are trade deficits always a sign that we are being "ripped off?"
• Who will pay for the tariffs? Americans? Foreign countries? Some of each?
• Tariffs are strong medicine. What side-effects can we expect?
• Tariffs are touted as a tool for the reindustrialization of America. Are they likely to achieve that objective?
• Will tariffs raise prices? If so, will the increase be just a blip, or will it take the form of lasting inflation?

After a short introduction to cover some tariff basics, our April 16 meeting will throw these and other tariff-related questions open to discussion.

Some suggested readings:

• Trump's Tariffs Make No Sense (Jason Furman, NYT)
• Who's in Store for Pain and Gain under Trump's Economic Plans (Lael Brainard, WaPo)
• Why a War on the Trade Deficit Won't Reindustrialize America (Ed Dolan, Niskanen Center)
• Will Malignant Stupidity Kill the World Economy? (Paul Krugman, Newsletter)