Trump's 'Tariffs Have Really Just Hurt Us,' Conservative Economist Tells Fox Business

Economist Tori Smith said on Thursday that President Donald Trump's policy of implementing tariffs on trading partners and rivals is having a negative impact on American consumers, despite the administration's claims to the contrary.

Smith, a trade economist with the conservative Heritage Foundation, made the remarks during an interview with Fox Business. Host Cheryl Casone asked the economist about the new tariffs the European Union has considered implementing on the U.S. if it refuses to settle trade disputes. Although the Trump administration's ongoing trade war with China—during which the president has repeatedly raised tariffs targeting the Asian nations' products—gets more attention, levies have also been implemented on a range of European goods.

"The U.S. retaliating with tariffs have really just hurt us, and not them," Smith argued during the Fox Business segment.

When asked specifically about Trump's threat to further increase tariffs on China if a trade agreement is not reached soon, Smith said that American consumers would feel the financial burden. "This is a direct tax on the American people that will be felt much heavier than previous iterations," she said, pointing out that the additional levies would target goods ranging from electronics to items for babies and children.

In additional comments to Newsweek, Smith noted that the Heritage Foundation has opposed tariffs since the start of the trade dispute with China.

"We have suggested alternative mechanisms including targeted sanctions by the Treasury Department on individuals and companies that are found to have stolen U.S. intellectual property," she said. "We also suggest utilizing the WTO [World Trade Organization], which has been a very effective mechanism in addressing trade concerns with China. The U.S. wins nearly every case it takes against China at the WTO and China removes the offending policy following a WTO determination," the economist added, warning that the current administration is undermining the international organization.

Smith asserted that the Trump administration's use of tariffs is "just bad policy in general."

The International Trade Administration at the U.S. Department of Commerce did not immediately respond to an emailed request for comment from Newsweek.

Trump has repeatedly argued that China is paying the tariffs he has implemented, not the American people. That assessment, however, goes against the analysis of most economists and financial experts.

"So far our consumer is paying nothing," Trump claimed in an August tweet, arguing that the trade war with China was "going along very well." Later that month, Trump reiterated the same assessment.

"The only impact has been that we've collected almost $60 billion from China—compliments of China," he told reporters at the time. Trump argued that the impact on American consumers was "virtually none."

Multiple economic studies have directly contradicted the president's claim. A study by researchers at Harvard University, published this summer, found "nearly complete" transfer of tariff costs onto American importers, who then passed along those costs to consumers and purchasers. The study noted that the economic burden from the trade war with China had "fallen largely on the U.S."

Trump in China
President Donald Trump speaks to business leaders at the Great Hall of the People on November 9, 2017 in Beijing, China Thomas Peter-Pool/Getty

Back in March, a study by economists at the Federal Reserve Bank of New York, Princeton University and Columbia University showed that "tariff revenue the U.S. is now collecting is insufficient to compensate the losses being born by the consumers of imports." Their research also noted that voters in farming regions, which largely backed Trump in 2016, had felt the brunt of the trade war, as China's retaliatory tariffs had targeted the U.S. agricultural sector

Gary Cohn, a former top executive at the investment bank Goldman Sachs, quit Trump's economic advisory team in 2018 due to the president's implementation of tariffs on steel and aluminum imports. In an August interview with the BBC, Cohn suggested that China wasn't even concerned about the trade dispute, while arguing it had harmed the U.S.

"I don't really think it's hitting the Chinese economy," he asserted, warning that the tensions have had a "dramatic impact" on American manufacturing and investment.

"Tariffs don't work. If anything, they hurt the economy," Cohn said in an interview with Freakonomics radio in March.

This article has been updated with additional comments from Tori Smith.