The Embarrassing Truth About Tariffs

Why is Trump so upset about Federal Reserve economic research into his trade policies?

WSJ editorial. Excerpts:

"American households and businesses are bearing nearly 90% of the cost of the Trump tariffs"

"Kevin Hassett, director of the National Economic Council, took to CNBC Wednesday to pan the New York Fed research as “the worst paper I’ve ever seen in the history of the Federal Reserve System” and suggested the people who wrote and published it should be “disciplined.”"

"The Fed analysis aligns with other research into the distribution of tariff costs from Harvard economists and Germany’s Kiel Institute—and with common sense. There isn’t widespread evidence that foreign producers are cutting their prices to offset the tariffs"

"Nor is the dollar strengthening, which is the other possible mechanism for making foreigners pay"

"tariffs are causing an increase in post-tariff prices of those goods that are still imported"

"Americans pay higher prices, or “pay” in the form of less choice."

"he said last year that Americans may have to buy fewer dolls for their children as a result of his trade policies"

"So far the manufacturing boom Mr. Trump promised hasn’t appeared, as manufacturing jobs are down over the last year."

"To the extent American companies eat some of the costs of tariffs, that’s less cash available for investment and hiring." 

"The market response to his April 2025 “liberation” tariffs was so negative that the President quickly withdrew them and negotiated lower tariffs"

"He has also laced the tariffs with multiple exemptions."