Nearly a thousand economists have jointly criticized Trump's tariff policies, warning that it could lead to an economic recession.

Taiwan • Business • 04/20 02:37
Nearly a thousand economists have jointly criticized Trump's tariff policies, warning that it could lead to an economic recession.

In April 2025, nearly a thousand economists jointly published an open letter criticizing President Trump's tariff policy, stating that the calculation method is flawed and lacks an economic theoretical basis, potentially leading to an economic recession. Signatories include Nobel Prize winners in economics, James Heckman and Vernon Smith, and former senior government economic advisors. This statement has drawn both domestic and international attention to U.S. trade policy, pointing out the political motivations behind the policy and its impact on global markets.

Key Updates

04/20 16:36

The United States levies port fees on ships made in China, which benefits Taiwanese shipping companies because they have a low percentage of ships made in China.

On April 17, 2025, U.S. President Donald Trump signed an executive order announcing the imposition of significant port fees on ships manufactured in China or owned and operated by companies based in China. The order aims to weaken China's stronghold in the global shipping and shipbuilding industries and to revitalize the U.S. shipbuilding industry. The port fees will be rolled out in phases starting October 14, 2025. Taiwanese shipping companies Evergreen, Yang Ming, and Wan Hai are expected to benefit from this policy because they use fewer Chinese-built ships.

04/20 15:05

Decline in Hong Kong's Exports Affects the 2025 Economic Growth Target: Companies Seek New Markets Amid the US-China Trade War

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04/20 14:37

International grocery stores in the U.S. face import tariffs and supply chain challenges: Small retailers are feeling overwhelmed

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04/20 12:36

The United States has imposed tariffs on Chinese goods, causing a surge in the prices of baby products and sparking consumer concerns.

In April 2025, the U.S. government announced a new round of tariff increases on imported goods, specifically imposing a 145% tariff on Chinese goods, causing prices of childcare items such as strollers and car seats to surge. With insufficient domestic manufacturing capacity, the supply shortage worsened. Consumers and retailers faced increased cost pressures, with some brands opting to absorb some of the tariff costs. Medical institutions were also impacted by their reliance on imports, heightening the supply chain's vulnerability.

04/20 07:06

Lai Cheng-i, Honorary Chairman of the Taiwan General Chamber of Commerce: How the Tariff War Affects Taiwan's Real Estate Market and Creates New Opportunities for Cross-Strait Industrial Cooperation

Lai Cheng-yi, Honorary Chairman of the Taiwan General Chamber of Commerce, stated at the "Cross-Strait Grassroots Livelihood Development Forum" that the US-China trade war and the US's high tariff policy towards Taiwan will affect Taiwan's consumer structure and domestic demand market within one to two years, but housing prices are not likely to drop in the short term. Lai is optimistic about a recovery in China's real estate market and suggests that Taiwanese businesses boost domestic sales and enhance digital marketing, and foster cross-strait high-tech manufacturing collaboration to meet the demands of global supply chain restructuring and industry upgrades.

04/20 02:37

Nearly a thousand economists have jointly criticized Trump's tariff policies, warning that it could lead to an economic recession.

In April 2025, nearly a thousand economists jointly published an open letter criticizing President Trump's tariff policy, stating that the calculation method is flawed and lacks an economic theoretical basis, potentially leading to an economic recession. Signatories include Nobel Prize winners in economics, James Heckman and Vernon Smith, and former senior government economic advisors. This statement has drawn both domestic and international attention to U.S. trade policy, pointing out the political motivations behind the policy and its impact on global markets.

04/19 22:04

Taiwan's industrial computer manufacturers respond to U.S. tariffs: Price hikes and plans to set up U.S. factories are advancing in tandem

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04/19 18:06

Trump's Tariff Policies Spark Volatility in the U.S. Treasury Bond Market: Rising Yields and a Shift in Safe-Haven Investments

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04/19 16:36

Faced with rising costs of baby products due to tariff pressure, new parents in the United States are turning to second-hand markets.

The United States has imposed tariffs as high as 145% on Chinese goods, leading to a spike in the prices of baby products and toys, impacting how new parents raise their children. With nearly 90% of these products being imported from China, many families are turning to the second-hand market to manage the high costs. The increased demand for second-hand goods shows how American families are adjusting their lifestyles in response to trade policies.

04/19 15:35

Mazda has temporarily suspended CX-50 exports to Canada due to the US-Canada trade tariff conflict, leading to inventory shortages for dealers.

Mazda Motor Corporation announced on April 18, 2025, that due to the trade conflict between the United States and Canada, it will temporarily suspend exports of the CX-50 from its Alabama plant to Canada starting May 12. This decision is in response to the United States imposing tariffs on Canadian goods and Canada's retaliatory tariffs. Mazda emphasized that this suspension is indefinite, and future supply is uncertain. Canadian dealerships have only a small amount of inventory remaining, and once sold out, there will be no restocking, resulting in a gap in the local product lineup.

Statement Content and Core Criticism

This open letter, co-authored by economists from several American universities and think tanks, systematically criticizes the "Day of Liberation" tariff policy announced by the Trump administration on April 2. The statement points out that Trump's so-called "reciprocal tariffs" are calculated using an "incorrect and hastily cobbled-together formula," completely lacking an economic theoretical basis. The letter states: "These tariff measures, claimed to be a means of economic liberation, actually undermine the prosperity and freedom brought by free trade."

The statement further points out that the Trump administration misunderstands the economic situation of the American public, mistakenly viewing the trade deficit as evidence of national exploitation, while ignoring that the deficit is essentially a result of domestic savings and investment imbalances. Economists warn that this misconception will lead to policy errors, ultimately costing American workers, including rising prices and reduced job opportunities.

Signatories' Background and Academic Standing

The statement's signatories include Nobel laureates in economics James Heckman and Vernon Smith, renowned for their work in labor economics and experimental economics, respectively. Other signatories include N. Gregory Mankiw, former chairman of the White House Council of Economic Advisers during the George W. Bush administration, and Phil Gramm, former Texas Republican senator and economist.

As of the evening of April 19, Eastern Time, 956 economists had signed the statement, encompassing both liberal and conservative scholars, indicating that criticism of Trump's tariff policy has crossed party lines.

Economic Data and Policy Impact

According to estimates by Yale University's Budget Lab, the tariff measures implemented by the Trump administration have raised the overall effective tariff rate in the United States to 28%, the highest level since 1901. The Washington think tank "Center for American Progress" (CAP) points out that these tariffs have had a substantial impact on U.S. export industries such as automotive, aviation, pharmaceuticals, and energy, potentially affecting at least 2.6 million workers.

Additionally, Columbia University economist Jeffrey Sachs noted at the Antalya Diplomacy Forum that Trump's trade policy led to a $10 trillion evaporation of global market wealth in just two days. Although some assets later recovered, this shock exposed the policy's uncertainty and destructiveness. He described Trump's economic logic as "Mickey Mouse economics" and criticized his understanding of the trade deficit as "not even up to the level of the second day of an international economics course."

Policy Background and Political Motivation

Since the 1980s, Trump has advocated for an "America First" trade view, considering trade deficits as evidence of other countries taking advantage of the U.S. On April 2, 2018, he announced high tariffs on goods from multiple countries, calling it "Day of Liberation," and a week later temporarily suspended some tariffs for 90 days, but continued to increase tariffs on China. This policy inconsistency and uncertainty have caused market turmoil and led allies such as the EU, Japan, and Canada to consider retaliatory tariffs.

The statement also points out that Trump's trade policy has clear political motivations, particularly targeting voters in the swing states of the American Midwest. These regions, having suffered manufacturing job losses, harbor hostility towards foreign competitors. Trump uses tariff policy to project a tough image, attempting to consolidate votes.

International Reaction and Supply Chain Risks

The EU and Canada have prepared retaliatory tariff lists covering U.S. export goods such as motorcycles, peanut butter, and chewing gum. Japan has made concessions on automotive safety standards in an attempt to secure tariff reductions from the U.S. Analysts point out that these retaliatory measures will further increase operating costs for American businesses, especially manufacturers reliant on imported parts.

Additionally, Trump's tariff policy on China has triggered supply chain restructuring risks. The U.S. electric vehicle industry is highly dependent on Chinese batteries and components. If tariffs continue to rise, it could lead to the U.S. losing its competitive edge in the global electric vehicle market over the next 20 years.

Academic Appeal and Policy Recommendations

The statement concludes by urging the U.S. to return to a rules-based multilateral trade system and emphasizes that free trade and international cooperation are crucial for addressing climate change and high debt challenges. The signatories state: "We still believe that solid economic principles, empirical evidence, and historical experience will ultimately triumph over the current protectionist myths."

References

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