That’s the setup behind a new Economic Letter from the regional bank, which warns of declining wages, higher unemployment, and shrinking GDP in the wake of Trump’s new tariffs. In a recent letter to the European Union, Trump put it plainly: “If for any reason you decide to raise your Tariffs and retaliate, then, whatever the number you choose to raise them by will be added onto the 30% that we charge.” A version of that sentence went out with all the letters announcing tariff rates that Trump sent last week. Economists ignore all the distortions in global manufacturing caused by the mercantilist policies of China, the EU, and dozens of other nations, assuming that products are currently made where efficient markets have decided they should be due to specialization or comparative advantage.
Author: John Carney, John Carney
Published at: 2025-07-14 22:45:14
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