Although University of Chicago economics professor Brent Neiman served in the U.S. Treasury Dept. under former President Joe Biden, the Trump Administration used his research to make its arguments in favor of tariffs.
President Donald Trump, along with key allies like Commerce Secretary Howard Lutnick and trade adviser Peter Navarro, is pushing steep new tariffs that are causing the stock market to plummet. According to economists Paul Krugman and Robert Reich, Trump’s tariffs will cause a wide range of goods to soar in price and could be a factor in pushing the United States into a recession.
In an op-ed published by The New York Times on April 7, Neiman argues that Trump and his allies are taking his research out of context badly distorting his economic analysis.
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“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 their numbers,” Neiman explains. “But they got it wrong. Very wrong.”
The economist continues, “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.”
Trump’s allies, according to Neiman, are distorting his views on trade deficits.
“There are some reasonable arguments in favor of reducing the overall trade deficit, such as to reduce risks from our debt,” Neiman notes. “But these arguments don’t apply country by country…. For the sake of argument, let’s grant President Trump his goal of eliminating all trade deficits, no matter how destructive that would be. Could these reciprocal tariffs succeed? Again, no.”
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The University of Chicago professor notes that the Trump Administration has a “formula” that “uses four different numbers to calculate tariffs.”
According to Neiman, “The part that directly relates to our research is an estimate of how much import prices change in response to the additional costs imposed by tariffs…. The (Trump) Administration’s trade office cites our work, but mentions a different result from the paper, which found a low pass-through rate to the listed prices at two retailers. The Trump Administration then plugs a rate of 25 percent into its formula. Where does 25 percent come from?…. The methodology note offers shockingly few details.”
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Brent Neiman’s full New York Times op-ed is available at this link (subscription required).
