Fed Study Vindicates Trump's Trade Policy

On Tariffs

The Tarifflation Narrative Was Destroyed by a San Francisco Fed Paper

For as long as anyone can remember, economists and journalists have issued a consistent warning about tariffs: they will push prices up. It’s been the cornerstone of the case against President Donald Trump’s trade policy.

Raise tariffs, and consumers will pay more at the checkout counter. It’s simple economics, the Democrats, etc. tell us.

A new paper from the Federal Reserve Bank of San Francisco suggests the economic establishment got this one backwards.

Economists Régis Barnichon and Aayush Singh examined major tariff changes across the United States, the United Kingdom, and France over 150 years. Their finding: when tariffs rise, inflation actually falls. Higher unemployment also follows, but the consumer price spiral that economists predicted? The data doesn’t support it.

This doesn’t mean tariffs are costless. It means the case against them will have to rest on grounds other than “they make things more expensive.”

Read the rest of the report