Economist Justin Wolfers exposed how Trump’s tariffs are making goods pricier and America itself look unreliable. He proved that the self-proclaimed “deal-maker” is just breaking the world’s trust instead.
Wolfers, speaking on BBC News, called out the Trump administration’s proudest policy for what it really is: a self-inflicted wound. “Tariffs raise costs,” he explained. Which either means “lower profits for American businesses” or “higher prices for American consumers.” But these are simply the direct impacts of tariffs. What gets missed is how they make America an unreliable trading partner for the world.
“America has shown itself to be a combative and often unwilling trading partner. An unreliable trading partner, and it’s sort of tipped the bucket on the global trading system. And so you’re seeing countries all around the world reorganizing, looking for more stable friends.”
Wolfers’ warning is about reputation. The U.S. has turned itself into the untrustworthy ex in the global marketplace. Countries affected by abrupt tariff hikes are diversifying supply chains toward Asia, Latin America, and within the EU (via World Bank). Wolfers’ line about America being an unreliable partner should terrify policymakers. Every unpredictable tariff cycle pushes allies closer to self-sufficiency and rivals like China into stronger bargaining positions.
In fact, businesses planning billion-dollar factories are struggling to price these “political mood swings” into their spreadsheets. And in the end, everyone’s losing their minds and money. On top of it, the inflation caused by these tariffs is also not one that resolves on its own. They directly make prices higher without adding any value.
On MSNBC, Wolfers explained that “tariff-driven, cost-driven inflation” is worse than ordinary inflation. Prices rise, but wages don’t follow. In turn, households lose purchasing power with nothing to offset it. The Bureau of Labor Statistics reports consumer prices up 3% year-over-year. It’s better than COVID peaks, but far from painless.
Despite Trump’s repeated claim that foreign exporters pay the tariffs, it’s U.S. importers, and ultimately U.S. households, who foot the bill. The Council on Foreign Relations bluntly states that tariffs are a tax on imports, not on foreign countries. In fact, roughly 90% of tariff costs under Trump’s previous rounds were borne by Americans themselves (via NBER).
So when Trump brags about raising trillions, Wolfers joked, “if any of those numbers were true, we could all be on yachts right now.” And it doesn’t take an economist to understand this. Users on X spoke way smarter than Trump ever did with his printed speeches.
“If I recall correctly, experts have told Trump since the 1980s that tariffs don’t work the way he thinks,” one user wrote. Another added, “Trading is a lot like dating—if you act like a jerk, your partner will start looking for someone else. This stuff isn’t that complicated.” Except for Trump, everyone understands that these “America First” tariffs can end up leaving America last in line.
Have a tip we should know? [email protected]
