Here’s a presentation on tariffs I made with my colleague Michael Bordo at a Hoover Institution Economic Policy Workshop. Mike describes how Trump’s tariffs policy ignores the important lessons of history that tariffs are costly mistakes. In the second half of the presentation, I describe the likely adverse impacts of tariffs on the economy, financial markets and the Fed, with a focus on the potential high costs of a loss of U.S. government credibility and reliability. I conclude with a scenario analysis of Trump’s tariff policies and speculate on probable outcomes.
