How have independent economists evaluated the economic effects of Trump's post-2024 tariffs and trade deals?

1. Tariffs cut bilateral trade but redirect commerce elsewhere

Firm empirical work by independent forecasters shows tariffs have reduced U.S.–China bilateral trade in key sectors such as electronics, but much of the forgone bilateral trade was diverted to other Asian suppliers rather than producing big improvements in the U.S. trade balance ^[1]. Models and trade‑flow data from Oxford Economics and similar analysts therefore conclude tariffs change trading patterns more than they shrink overall U.S. deficits ^[1].

2. Measured GDP and welfare costs: small on some models, meaningful on others

Quantitative estimates vary: the Tax Foundation’s calculations place long‑run GDP costs in the tenths of a percent range—an estimate of about a 0.2 percent hit from retaliatory measures and up to 0.7 percent when combining U.S. and foreign tariffs—suggesting measurable but not catastrophic losses under certain scenarios ^[2]. Yet institutional modelers at PIIE and researchers who layer in plausible policy combinations warn of materially larger welfare losses, especially when tariffs coexist with shocks to financial confidence or monetary credibility ^{[5] [6]}.

3. The burden falls on consumers and lower‑income households

Academic syntheses and policy briefs underscore a recurring finding: tariffs are largely borne by U.S. consumers, with disproportionate effects on lower‑income households that spend a greater share of income on imported goods—research from Stanford SIEPR and other recent studies solidifies economists’ opposition on distributional grounds ^[4]. Mainstream press reporting and academic commentary likewise cite rising consumer prices as a near‑universal short‑run effect of the administration’s tariff measures ^{[7] [8]}.

4. Trade diversion, political signaling and uncertain revenue dynamics

Some independent strategists point out opportunities: high reciprocal tariffs can generate revenue and be used as bargaining leverage if trading partners open markets quickly, a thesis advanced by a few economists who argue for calibrated reciprocal rates ^[9]. But many forecasters cautioned that uncertainty and erratic timing of tariff announcements reduce bargaining power, encourage pre‑emptive imports, and create volatile market reactions that undermine any neat revenue story ^{[10] [11]}.

5. Macro amplification risk: deficits, Fed credibility and financial‑market spillovers

Beyond direct trade effects, authoritative institutes warn of amplification channels: if tariff policy coincides with larger deficits and political interference in the Fed, the combined effect could trigger capital outflows, currency depreciation, higher inflation and ultimately weaker employment—outcomes that would magnify the direct harm of tariffs ^{[5] [12]}. Major newspapers and Bloomberg analysts emphasize that mainstream models may understate these systemic risks tied to policy mix and institutional erosion ^{[8] [7]}.

6. Where economists disagree and why it matters

Disagreements hinge on assumptions: how high tariffs will ultimately be, whether retaliation will be fully enforced, the pace of trade diversion, and interactions with fiscal and monetary policy—which produce estimates ranging from modest GDP losses to sizable macroeconomic harm ^{[6] [2] [5]}. Complementary policy moves—deregulation and tax cuts—are cited by some proponents as offsetting forces ^{[3] [7]}, while skeptics treat those offsets as insufficient against the concentrated price and distributional harms of tariffs ^{[4] [13]}.