Trump economic adviser says economy is proving tariff critics wrong

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White House trade policy adviser Peter Navarro said that President Trump’s tariffs are actually boosting the economy, proving critics of his trade policies wrong.

Navarro noted, in a Wall Street Journal opinion piece, that the economy had added 7 million jobs over the last three years, the unemployment rate was near a record low of 3.6%, and median household income rose to $66,000 last year, among other gains.

“This jarring disconnect between the forecasts and the real Trump economy would be comical if the policy stakes weren’t so high,” Navarro wrote.

Navarro also argued that the administration’s policy had made tariffs a useful political tool as well. “President Trump’s imposition of actual tariffs has made the threat of tariffs more credible, and a variety of Trump tariff threats have borne robust results,” he said, pointing to the negotiation of the U.S.-Mexico-Canada Agreement on trade and a trade pact with Japan.

He argued that economists needed new models to assess the impact of tariffs that would “dynamically score the many long-term positive effects, and parse the complex ways tariffs affect trade partners’ behavior,” among other adjustments.

The Trump White House has placed tariffs of 25% on about $250 billion worth of Chinese goods and 7.5% tariffs on another $156 billion in goods. Steel imports face a 25% tariff, and aluminum imports are subject to 10% levies.

Economic studies have found few negative effects from the administration’s tariffs to date because importers have mostly absorbed the costs through lower profits, relying on pre-tariff inventories and shifting supply chains. Business groups argue, though, they cannot rely on such workarounds forever, and that eventually, the higher costs created by tariffs will result in higher prices for consumers.

[Also read: ‘Big Kahuna’ economy positions Trump for victory in 2020]

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