Trump’s Tariffs Will Wound Free Trade, but the Blow May Not Be Fatal

The global trading system has been under pressure for a while, and that pressure has really been symbolized by the rise of China,

Professor Johnson said

It will not be the end of free trade, but it is certainly a retreat from unfettered free trade, which is the way the world seemed to be going,

said Eswar S. Prasad, a professor of trade policy at Cornell University

If you think about the broader conflict between the U.S. and China, ... the economic and financial relationship provided a degree of balance. That balance is now eroding.”

Professor Prasad said

Jason Furmanformer Council of Economic Advisers Chair

You’re going to see more countries around the world striking free trade deals, just around the U.S.,

said Jason Furman, a professor of economic policy at Harvard Kennedy School who was chairman of the Council of Economic Advisers during the Obama administration

A lot will depend on how Europe decides to play this,

said Simon Johnson, a professor at the Sloan School of Management at M.I.T. and former chief economist at the International Monetary Fund

That would create a big non-U.S. trading bloc,

he continued

Logically, this would be a time when the rest of the world bands together to promote free trade among themselves,

he said

I see it as a turning point for the United States at the center of the global trading system,

he said

Keir Starmerprime Minister

Old assumptions can no longer be taken for granted. The world as we knew it has gone. We must rise to meet the moment,

Starmer wrote

Donald Trumppresident

If you tax our goods, we'll tax yours. If you don't open your market, neither will we."

FOR United States President Donald Trump, reciprocity means

This is a pretty seismic and significant shift in the way that we trade with every country on earth,

she added

The market has spoken" in rejecting Trump's tariffs

Beijing on Saturday said

This is the single biggest trade action of our lifetime,

said Kelly Ann Shaw, a trade lawyer at Hogan Lovells and former White House trade adviser during Trump's first term

The way in which we calculate the tariffs is using a sophisticated quantitative model that needs to go through a supercomputer to speed up what the tariff rates are. I do not think that that's what they have done."

Pau Pujolas, professor of economics at McMaster University, previously told Newsweek

The formula published by the Office of the U.S. Trade Representative has two additional terms in the denominator that just so happen to cancel out: (1) the elasticity of import demand with respect to import prices, ε, and (2) the elasticity of import prices with respect to tariffs, φ,

the authors wrote

Nate Silverpollster

OMG they applied their stupid f***ing formula incorrectly?!?

Polling analyst Nate Silver shared the report on Friday on X, formerly Twitter, and wrote

President Trump's Tariff Formula Makes No Economic Sense. It's Also Based on an Error."

The new analysis was titled

Big business is not worried about the Tariffs, because they know they are here to stay, but they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy,

Trump wrote

Their mistake is that they base the elasticity on the response of retail prices to tariffs, as opposed to import prices as they should have done,

the scholars wrote

As we work to address the new trading terms with our business partners, we are taking some short-term actions, including a shipment pause in April, as we develop our mid- to longer-term plans,

JLR said in a statement