Peter Navarro Takes Down a Tariff Straw Man

No serious economist predicted that the levies would ‘immediately crash the economy’ or ‘ignite runaway inflation.’

Letter to The WSJ.

"Peter Navarro begins his op-ed “Tariffs Are a Discipline, Not a Press Release” (Dec. 22) by knocking down a straw man. No serious economist predicted that the levies would “immediately crash the economy” or “ignite runaway inflation.” We said they’d make Americans poorer by forcing them to pay higher prices or accept inferior substitutes—which is exactly what’s happening.

Mr. Navarro claims victory because we haven’t seen a recession. But his colleague, Commerce Secretary Howard Lutnick, promised in March that the economy would be “humming” by now. Instead, manufacturing employment has declined for nine consecutive months, business optimism is depressed and consumer sentiment nears historic lows.

Notice the pattern: When tariffs don’t deliver the promised renaissance, administration officials push back the timeline. First it was weeks, then months. Now, we need “the right timeline” and must not grade policy “on a news cycle.” This isn’t economic analysis—it’s buying time until the economy improves despite tariffs, at which point the administration will claim victory.

Mr. Navarro says that a slogan, “Who pays the tariff?,” is misleading. The data say otherwise. The Harvard Pricing Lab finds that after six months U.S. consumers are eating 20% of the tariffs on average in the form of higher prices. For President Trump’s first-term tariffs, the pass-through rate stayed under 5% for a full year. Mr. Trump 2.0’s tariffs are hitting us harder and faster, and there’s evidence that this pass-through rate will climb.

Tariffs don’t “discipline” foreign producers. They discipline American families, businesses and workers who must now pay more for less. No amount of rhetorical repackaging will change that.

David Hebert

American Inst. for Economic Research

Grand Rapids, Mich."