The Economics Show
Would Trump’s tariffs really be that bad? With Kimberly Clausing
Nov 18, 2024
In this engaging discussion, Kimberly Clausing, a UCLA professor and former lead economist in the Biden administration, explores the potential impacts of Trump's tariff policies. She examines whether tariffs are as harmful as some believe and reflects on past economic outcomes. Clausing highlights misconceptions about the U.S. trade deficit and argues that tariffs alone won’t fix underlying issues. The conversation also delves into how trade policies have historically impacted corporations and workers, advocating for more equitable economic solutions.
33:12
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Quick takeaways
- Trump's tariffs could severely damage the economy, potentially reaching 9.5 on a harmful scale when combined with other policies.
- The relationship between tariffs and trade deficits is complex, suggesting that tariffs alone may not effectively address trade imbalances.
Deep dives
Impact of Tariffs on Economic Policy
Trump's proposed tariffs include a broad 10% levy on all trading partners and a significant 60% tariff on imports from China. Such policies could have a severe negative impact on the economy, ranking around an eight out of ten in terms of damage if considered in isolation. When coupled with other policy changes, such as deportation policies and challenges to central bank independence, the damage could rise to a staggering 9.5. This potential harm underlines the risks of relying on tariffs as a trade instrument, especially when they can lead to economic instability and retaliatory actions from other nations.
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