The Donald Trump administration has officially announced a sweeping new set of tariffs ranging from 10% to 12.5% on 60 designated trading partners—encompassing over 80 individual countries when accounting for the European Union—to replace expiring temporary duties.
However, prominent University of Michigan economist Justin Wolfers warns that while this latest framework may survive judicial scrutiny, it “will still fail our country” and represents a “new wrapper, same rotten policy.”
A Fresh Wrapper for an Ongoing Trade War
Rolled out hours before a 10% temporary global surcharge expired under Section 122 of the Trade Act of 1974, the administration’s new measures rely on Section 301 investigation powers centered on forced-labor enforcement.
Though legally distinct, the strategy covers more than 99% of U.S. imports. Analyzing the move, Wolfers noted that the White House switched strategies after previous emergency-style tariffs were struck down by the Supreme Court.
He explained that the Administration may have gotten the law right, but they still got the economics wrong. According to Wolfers, this third attempt at tariffs is “somewhat likely to survive,” because it’s smarter or more principled, but because it comes wrapped in a process that courts are more likely to tolerate.
“But they will fail to deliver for the American people. These latest tariffs may pass muster with the courts, but will still fail our country,” he added
Trump just announced the next phase of the trade war, with 10-12.5 percent tariffs on all of our major trading partners. I've got you covered with a deep dive into the law, economics, and politics of this latest episode of the Trump tariff saga:https://t.co/kAq8bMsSbZ
— Justin Wolfers (@JustinWolfers) July 23, 2026
‘Better Lawyers, Worse Economics’
Under the new policy, countries deemed compliant with forced-labor enforcement face a 10% import tax, while non-compliant partners face 12.5%.
Wolfers labeled the 2.5 percentage point differential “not diplomacy, that’s a rounding error,” arguing that targeting broad trade alliances destroys American leverage rather than creating it. “What’s going on here is so transparently bad faith. It might pass muster with the courts, but it won’t with our trading partners,” he added.
Comparing trade policy to a “horror movie zombie” that keeps returning uglier, Wolfers cautioned that shifting legal justifications does not alter the underlying economic toll.
“We’ve got the same trade war, the same players, probably better lawyers, but I think ultimately worse economics,” Wolfers concluded. “And along the way, you and I, we’re going to end up paying higher prices, too.”
How Have Markets Performed In 2026?
The S&P 500 index has advanced 8.02% year-to-date. Similarly, the Nasdaq Composite index was up 8.19%, and the Dow Jones gained 6.88% YTD.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, closed higher in premarket on Friday. The SPY was up by 0.28% at $740.28, while the QQQ advanced by 0.12% to $692.80.
Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), was up 0.56% at $519.16 on Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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