The experts bet against Trump’s tariff policy and lost …
… says Matt Margolis in this PJ article. But the vast majority will never admit it.
But it occurs to me that it’s not just that they thought his tariff policy would be disastrous and they were wrong (at least so far). After all, I certainly thought his tariff policy might be disastrous or at least considerably worse than it’s turned out to be. However, I realized – because it was apparent from Trump’s history – that his tariff policy would feature opening moves in a chess game in which he would pressure other countries initially and then make a deal that aimed at a result that was quite different from what it had initially appeared to be. I respected that about him and still do, and have observed that his endgame virtually always includes a goal that would benefit the US, and that he often achieved it despite what looked like powerful odds against it.
But so many “experts” ignore that history of Trump’s successes, because they despise him. They continually bet against Trump and they often lose. And yet that doesn’t deter them from doing it again the next time and yet again and again, so strong is their dislike for him and their contempt for his style of negotiating. And to top it all off, there usually isn’t any penalty for their having been wrong, or any demand for accountability. So they persist, and their audience seems to lap it up.
I would love for someone to bet against me based only on dislike of me. Talk about easy money! We’re seeing the end of the ” age of experts”. Lolololol
It’s likely to take a year or more to conclude how much benefit/cost the new tariff agreements benefit the US economy.
One of the principal goals of the new agreements was reciprocity and reduced barriers to US exports. In our major trading partners several of them include those reduced barriers. A few are still in process and some have agreed to increase purchases/investment in the US economy.
I haven’t read any analysis on the extent foreign markets have been opened to US goods.
According to Grok:
Confirmed Tariff Reductions: Five deals explicitly or strongly imply reduced tariffs on U.S. exports:
EU: “No tariffs” on U.S. products (Post:2).
Japan: Expanded access for U.S. cars, rice, agricultural goods (Web:7).
U.K.: Increased access for U.S. beef, ethanol, industrial goods (Web:8).
Philippines: “Nearly unlimited open-market access” (Web:1).
China: Tariffs reduced from 125% to 10% (Web:0).
Unclear or No Reduction: Four deals (Indonesia, South Korea, Vietnam, Mexico) lack clear evidence of tariff reductions on U.S. exports, focusing on U.S. import tariffs or investments (Web:1, Web:6, Web:8). Pakistan’s deal is too vague (Web:8).
Total: 5 bilateral trade deals in 2025 reduced tariffs on U.S. exports to the other country, based on available data.
Source Credibility and Limitations Primary Sources: Web:0 (The Hill), Web:1 (Statista), Web:4 (White House), Web:8 (Holland & Knight) are weighted highest for trade deal specifics.
Legacy Media: Web:7 (World Score card), Web:17 (World Economic Forum) provide reliable details, weighted moderately high.
X Posts: Post:2 (EU deal) and Post:0 (Japan deal) align with web sources but are weighted low due to lack of detail.
Limitations: Only five deals (EU, Japan, U.K., Philippines, China) explicitly mention tariff reductions on U.S. exports (Web:0, Web:1). Others (e.g., Vietnam, Indonesia) are vague or ongoing, potentially underreporting tariff cuts (Web:8). No comprehensive 2025 list exists, and some deals (e.g., Pakistan) lack finalized terms. If you provide specific countries or deals, I can refine the count.
Conclusion In 2025, 5 bilateral trade deals (EU, Japan, U.K., Philippines, China) explicitly or implicitly reduced tariffs on U.S. exports to the other country, based on market access commitments or direct tariff cuts (Web:0, Web:1, Post:2). Other deals (South Korea, Indonesia, Vietnam, Mexico, Pakistan) lack clear evidence of tariff reductions on U.S. exports (Web:8). The table summarizes findings. If you need details on specific deals or a visual chart, let me know!
In a political system with a supreme leader who wields power through his (or her) Party, the supreme virtue is fealty to the leader and the functionaries of the Party. As such, for one to be lukewarm in support, to exhibit “both-side-ism,” is to risk being labeled “unreliable,” and one’s road through life will be bumpy. To oppose the leader and Party, is to be labeled “disloyal,” and utter ruination will follow.
A good argument can be made that the Biden administration was such a political system (whether actually headed by Biden or his eminence grise, Obama). Even though Biden was deposed in a palace coup, and his appointed replacement Harris lost to Trump, the Democratic Party and its many functionaries remain. Obama still exerts considerable power from the shadows.
The majority of so-called experts are enmeshed in this political system. They owe their prominence and livelihood to this system, and are still under the sway of the Democratic Party functionaries in academia and NGOs. They cannot risk appearing “unreliable,” let alone “disloyal.” Their careers would stall or end completely. So they oppose Trump and everything he attempts. While the experts may indeed be utterly wrong, they suffer no consequences because their loyalty to the Party remains steadfast.
For years, our trade experts have wanted to import from the lowest cost countries and have intentionally gutted our basic industries. It was a short-sighted policy based on two things.
1. Our tech advantage.
2. The belief that trade deficits don’t matter.
They didn’t foresee a backward China stealing our intellectual property, or Japan, South Korea, and EU countries (all allies) being willing/able to keep our exports out.
For many years I have read financial experts that kept saying that our trade deficit didn’t matter because of the Dollar standard and our overwhelming wealth.
The Global War on Terror managed to deplete our wealth (while not achieving the desired goal of stopping the jihadis.), and make many other countries (China, Japan, India, etc.) richer. Also, the BRICs (Brazil, Russia, India, and China) have been plotting to take the world off the Dollar standard. That would make the trade deficits matter. They are not our friends.
These are all things that Trump has seen that many experts have been blind to. We can continue on the path of least resistance and eventually become a former great power, or we can buckle down and do the work necessary to stay a great power.
Trade negotiations are never really final. All countries will try to get the most advantageous position possible. Trump knows this and is willing to keep on negotiating – always looking fora better deal. I have never read his book, “The Art of the Deal,” but I see pundits on TV saying that it explains exactly what he’s doing today.
Trump’s personality is not my cup of tea, but I admire his work ethic, his transparency, and his willingness to stand in the arena and fight for his policies. I’m betting he’s right.
I couldn’t resist: https://youtu.be/oAKgderUz-s?si=SfkdSbSFmVKCEfa5
It helps to remember that Trump the billionaire volunteered for duty as POTUS in 2016. The Democratic enemy resorted to many (wrong, even criminal) stunts to derail him. He’s survived two assassination attempts, which only increased his vigor and resolve. Remarkable vigor for age 79. Does not know the word “quitter”.
As POTUS he has in my opinion more positive impact on America than anyone other than Washington. Roosevelt’s impact, big picture, has been harmful in many ways..
In the old days, I thought (perhaps had been taught) that a tariff is simply a form of flat tax.
Had no idea of it as a tool for negotiation.
Richard, how long do you think it will be before the economics textbooks are amended to include this negotiation tool aspect for tariffs?
It helps that we do have a good set of cards with our high domestic market demand – although much of that market is for non-essential things bought because the “price was decent/low”.
We could live without them, or use more expensive domestically made examples, if we really had to, mostly to support and justify greater (non wasteful) expenditures for national defense or a few other more critical areas.
R2L:
Richard, how long do you think it will be before the economics textbooks are amended to include this negotiation tool aspect for tariffs?
——————————-
Textbooks are written by academics, not businessmen or politicians.
See Sennacherib’s thread-leading comment about the end of the ”age of experts”.
I wonder if Trump’s target was a re-designed census all along.
Re: s new census
On Fox News (– maybe WSJ’s Editorial Review show) yesterday afternoon they discussed how difficult getting a census now would be.
Said it takes many months of prep, and over 800,000 census workers.
They didn’t think it will be pulled off, even aside from lawsuits.
I wonder if Trump’s goal was really to bring people’s attention to the flawed 2020 census, and fix things to prepare for the 2030 census.
Oh also: to help justify the redistricting push.
There’s never going to be a “negotiation tool” aspect to the treatment of tariffs in textbooks, because they study the effect of a tariff on the economy, not the process of how that tariff was arrived at.
If Trump threatened to nuke nations that didn’t drop their trade barriers and they did, the econ textbooks would not include nuclear war as a negotiation tool either, for the same reason. The experts would still say nuclear war kills people, and I suppose we’d say “nuh uh it gets people to drop barriers”. Only if you don’t ACTUALLY DO it. If you actually do it it kills people.
The experts thought Trump would actually put the tariffs in place. This is why the experts were wrong: Trump didn’t do what he claimed he was going to do. Trump is being praised here mostly for NOT imposing tariffs. All of his negotiations are cementing in place the US as a net importing nation, and all of his negotiations are successful BECAUSE the US is a net importing nation and will continue to be so. They would not work unless the US continues to have a trade deficit. Everyone wants to sell to the US market. If they don’t, there’s no leverage to get them to drop trade barriers.
And no, a trade deficit is not bad. It just means someone has to run a currency exchange. Nations have four choices with what to do with the dollars from our trade deficit:
a) Spend them in the US
b) Exchange them for another currency with someone else who wants to spend those dollars in the US
c) Stockpile them, which means they’re trading their manufactured goods for numbers in spreadsheets of no intrinsic value
d) Spend them outside of the US with someone who wants dollars to spend in the US
Every foreign purchase I have ever made was choice b): I had to trade my dollars to my bank for whatever the foreign currency was. My bank ended up with the dollars from my contribution to the trade deficit. The buyer never got my dollars and didn’t want them. My bank bought euros or pounds or whatever from someone who DID want dollars, probably another bank with too many, or from some foreigner who bought something in the US.
well take joe stiglitz please after vouching for Fannie Mae and the Venezuelan central bank, he is still taken seriously by too many people, certainly a plurality,
david boudreaux I respect even though he may have been wrong in this instance, time will tell,
now our trade policy has been wrong in too many ways to correct in four years, that might well be like cutting the proverbial Gordian knot, so they will go on to something else, again, like the proverbial dog in Up, ‘chasing squirrels’
do these experts ever losr a slot on MSNBC one of the academic cloisters or a prestigious publisher ‘silly rabbit, tricks are for kids’
because they study the effect of a tariff on the economy, not the process of how that tariff was arrived at.
==
No, they discuss theoretical models of the effect absent other considerations.
The experts thought Trump would actually put the tariffs in place.
For some reason, the “experts” have a terrific problem in seeing what Trump is about. I suspect his rhetoric bothers them, so non-academic, and they can’t get past that. As has been said many times, take Trump seriously, but not literally. They are stuck on literally for some reason. As another example of that confusion, Obama had academic rhetoric down cold, and that impressed academics. But his actions had little to do with his rhetoric.
experts should be in quotes, they should have some trackrecord of expertise,
https://twitchy.com/justmindy/2025/08/10/illinois-pritzker-hypocrite-
redistricting-sunday-morning-cbs-n2417055
tariffs were maintained through the FDR administration at these levels, did they go down under Truman, probably
of course for the first decade after the war, Europe did not do a huge business in export,
I could be wrong about that, the American manufacturers were in first position
there were reductions with the adoption of the GATT, although trade authority did not reside with the President till the Kennedy administration
– Niketas C.
You gloss over the important consequences of the trade deficit, that we could “manage” in a previous time, when most of the foreign governments that held our dollars were allies/neutral toward the US. Even those who might not be friendly to US policy recognized the benefit of maintaining the US has a dominant global power.
That has changed IMO. Do we want adversaries owning assets in the United States? If we place additional restraints to foreign investment with those dollars, what will that do to the currencies value?
And what are the tools the US would do to maintain the dollar’s value? Increase interest rates. Maintain/increase inflation control. Reduce budget deficits. Those are all necessary steps, but the timing is all wrong– since those steps could lead to a retraction of the economy. And the status quo of allowing those foreign investments from adversaries can’t continue. Which increases the impetus of new foreign alliances (BRICS for example) which will conflict with the US dollar as the reserve currency. The common wisdom is that there is no need for concern that the USD will lose that status– but only as long as we use the tools to maintain its value.
President Trump is seeking to shift the dynamics to increase US exports which will have increased benefits to the US economy (to the benefit of American workers/Main St. over Wall St).
Given the short period of time the president has to make this shift sustainable, he is trying to make this transition at a time when the economy is fragile– which is why he is constantly moving the strategy to finesse both acceptable import tariffs and lowered export barriers.
We shouldn’t ignore the impact high trade deficits and increasing US debt will put increasing pressure on countries to seek alternatives to the USD.
Marlene,
You might be right, at the very least he wanted people to talk about it.
For a very long time – 50 years or more – “trading partners” of the US have had tariffs on goods imported from the USA.
I never heard one “expert” claim how that would be an economic disaster for that nation that imposed the tariffs, and I don’t think (though I have not checked into it) that any nation that has done so, has destroyed their economy by imposing tariffs.
I will venture to guess that there are close to zero nations that do not impose tariffs on goods they import from the USA.
So now Trump imposed tariffs on imports and bingo, all the economic “experts” claimed that the Great Depression II will be the result.
If Biden had imposed tariffs, these same “experts” would be jumping up and down about how this policy would raise employment levels, cause foreign domiciled firms to open new production here in the USA and otherwise provide a giant boost to the US economy.
Yes, I think we need to wait and see what the ultimate impact will be of these tariffs, but one possibility is that foreign domiciled firms, to help maintain their market share, will accept lower profits for those goods they export into the USA, as well as increase and/or open up production facilities in the USA.
It’s looking – yet again !! – that economic “science” is as much a science as astrology.
@Brian E:That has changed IMO. Do we want adversaries owning assets in the United States?
That has always happened. They get nationalized when the relationship gets too bad. Same for ours in other nations. I believe you specifically have called out the US for doing this to Russia, but I could be mistaken. When it happens it’s usually bad for the nation that bought the assets.
I would encourage our enemies to stockpile as many dollars as their spreadsheets can hold, sending us free stuff all the while, and then when war happens we say their spreadsheets are no good. Suckers.
I’m being facetious but foreign ownership of anything critical to security is something governments have many tools to manage, running a trade surplus is probably the least effective and direct that could be imagined. Ownership is a legal status that can be revoked at any time in an emergency, and is.
Trade dependence is a two-way street, so much so that nations at war sometimes continue to trade. And in fact Europe continues to buy and sell from Russia despite how bad their relationship is.
Choniates is right. Remember the scare the Japanese were buying everything. What are they going to do, dig it up and pack it off?
We suffer chronic over-consumption manifest in current account deficits. The problem can be ameliorated by (1) regularly balancing the federal budget over the course of a business cycle – modest deficits about one-third of the time, small surpluses about 2/3 of the time, (2) maintaining current practice in limiting the franchise of subsidiary governments to undertake long-term borrowing, and (3) instituting a federal value-added tax and replacing state and local sales taxes with a value-added tax. Rates would vary from one jurisdiction to another and the apportionment between federal / state & territorial / county / municipal &c would vary from one place to another. Posit a federal VAT collecting sums around about 9.5% of gross domestic product and accounting for about 70% of all VAT collections.
All of the Trump naysayers, every single one, fails to understand the man and his approach to these situations. All they have to do is read his book on negotiation. He is always negotiating. His opening bid or setting is just that, an opening not the targeted end result. That so many miss this continues to amaze me.
Actually, they despise him and everything he stands for.
And since they are the experts, they MUST be right.
Right?
Um, no, scratch that. It’s not even close. Let’s try this:
The man is Hitler, his followers drooling brownshirts.
(And that’s all ye’ need to know…because the experts have spoken….)
Simply put:
Trump cannot possibly be right.
About anything.
By definition.
Test
Related:
“Democrats Aren’t Hiding It Anymore: They Plan to Rig the System”—
https://pjmedia.com/matt-margolis/2025/08/10/democrats-arent-hiding-it-anymore-they-plan-to-rig-the-system-n4942573
Might this help?
“The Debt And Deficit Problem Isn’t What You Think”—
https://www.zerohedge.com/economics/debt-and-deficit-problem-isnt-what-you-think
Just a sec, says this economist:
“Deep State Data Manipulation Threatens Economic Stability”—
https://www.zerohedge.com/political/deep-state-data-manipulation-threatens-economic-stability
Continued…
You cant make this up
https://www.wsj.com/economy/the-u-s-marches-toward-state-capitalism-with-american-characteristics-f75cafa8?mod=mhp
They are desperate to beat Trump, and so they jump at whatever they can to create a narrative that makes him look bad. They always jump quickly, so they end up being wrong.
I’ve been curious as to why some folks maintain that “trade deficits don’t matter”. It seems counter-intuitive. Could the position be related to potential gains in certain sectors in the stock market? While some have made their lives secure/rich from investments, it hasn’t been much help to the lower working class that’s has been hurt as the nature of the US economy has shifted in the last 50 years.
So I asked Grok, “is there any correlation to US trade deficit and stock market gains in certain sectors and what sectors”. I suspect the first counter will be that correlation isn’t causation, but this is still something to consider.
As a follow up, I asked Grok, has the shift away from manufacturing in the US due to offshoring affected wages. Do the sectors with job growth pay similar wages?
I have argued previously that bringing back manufacturing jobs would be good for the economy, and more importantly, the lives of American workers, especially blue collar/semi-skilled workforce.
This is one of the many objectives of President Trump’s trade policies.
To be fair, these are complex issues, and don’t have simple answers.
I was struck by (and highlighted) Grok’s take on trade deficits, and was a completely unsolicited observation.
Thanks for another fine note—experts wrong, so far. Including economists like Kling, who I quite like.
Trump’s initial words and actions remain part of his negotiation style, and continue to confuse prior experts. His results, so far, are extraordinarily good. The Trump haters, and Republican haters, don’t want to admit it.
The Trump tariffs as implemented in agreements, are better than the prior regime, country by country.