Ford School professor and economist Justin Wolfers discussed the impacts of tariffs, uncertainty, and consumer sentiment on the US economy with several news outlets last week. Wolfers highlighted the response the stock market had to tariffs and what effect Trump administration policies would have on American consumers. Here are some of his recent comments.
"Why economic data will be skewed 'over the next few months'" Yahoo! Finance, March 5, 2025 - Speaking on economic data in the US Wolfers says we must "Be very careful about interpreting economic data over the next few months because you'll see a huge surge in imports followed by a huge decline in imports, both of which are basically due to trying to front-run the imports." This he says was caused because "The Trump economy began before he actually came to power" and is now facing increasing uncertainty and declining consumer and business sentiment, which could lead to reduced spending.
"Will Trump's agenda reduce prices? Economic experts debate" NewsNation, March 4, 2025 - Wolfers spoke with NewsNation about how the Trump administration's tariffs will impact American consumers. He explained, "Tariffs are a tax, they are a tax on imports. This is in fact the largest tax hike in the United States since 1993." For everyday Americans, Wolfers said "We are all going to pay some part of the bill, in return we are going to get a tax cut for the very wealthy," a tax that he characterized as "the reverse Robin Hood." He also noted that even those who are betting on the future profitability of American corporations are showing their discontent through the cratering of the stock market.
"Economic chaos, sowing the seeds of uncertainty" CNN, March 4, 2025 - In an interview with CNN, Wolfers said, "You can actually tie all of these threads together, from Ukraine to tariffs to DOGE," this common thread is "economic policy uncertainty that has just absolutely skyrocketed." Wolfers described the situation simply by saying "This is a chaotic White House that is sowing economic chaos" which has led to our "very sharp declines in consumer and business confidence."
"Market decline is a 'vote of no confidence' in the Trump admin" Yahoo! Finance, March 4, 2025 - Wolfers said on Yahoo! Finance that the decline in the stock market which puts it "at a lower level than it was the day before the election" shows the low levels of confidence in the current administration's economic policies. "It's a very sharp vote of no confidence," Wolfers explains. "The president historically listened very closely to what financial markets were saying," and according to Wolfers, "financial markets are saying they hate his latest actions."
"Not an economist alive' who would defend Trump's tariffs on Canada, Mexico, China: Economist" MSNBC, March 4, 2025 - Wolfers said on MSNBC, "I think what's coming out of the White House is frankly unmitigated nonsense and there's not an economist alive that would defend what they are doing." He went on to say, "Viewers don't have to believe me," the stock market demonstrated these same sentiments as it "fell 2.5% yesterday and an additional 1.5% this morning." Wolfers said that while the Trump administration tries to show how tariffs will help American companies and workers, "the reality is that you can't suspend the laws of economics and the laws of economics say that when you raise costs on businesses" the price increases are passed on to everyday Americans "almost dollar for dollar." He pointed out that not only are prices on imports going to rise but the price of domestic goods may also increase as tariffs diminish competition with international companies.
"How Economists Would Enact Trump’s Trade Goals. Hint: Not Like This." Barron's, March 3, 2025 - Wolfers commented on the Trump administration's decision to impose 25% tariffs, saying, "It doesn’t come from a model, from careful evaluation of the consequences of a tariff, or from history. It doesn’t solve a specific problem.” He said, “There’s nothing magical, useful, or relevant about the number 25%.”
