Brent Neiman, a Chicago economist believed to be the inspiration behind President Donald Trump’s tariffs, revealed that he was shocked to learn he is being associated with the policy, arguing the administration got its math wrong.
Neiman, an economist at the University of Chicago Booth School of Business, said the policy he originally proposed is based partly on academic work he co-wrote with three renowned economists— but insists the administration miscalculated. He also wrote in a New York Times Op-Ed on Monday saying “they got it all wrong.”
“Let’s start with the biggest mistake,” Neiman wrote in the Op-Ed. “The office said it calculated its reciprocal tariffs at a level that would theoretically eliminate trade deficits with ‘each of our trading partners,’ one by one. Is that a reasonable goal? It is not.”
The economist, who served in the Biden administration’s Treasury Department, wrote about his initial shock at the tariff’s announcement, where he was largely unaware that his ideas played a major role.
“My first question, when the White House unveiled its tariff regime, was: How on earth did they calculate such huge rates?”
But his question was answered the next day, when he said it got “personal.”
“The Office of the U.S. Trade Representative released its methodology and cited an academic paper produced by four economists, including me, seemingly in support of their numbers. But they got it wrong. Very wrong,” he said.
Neiman said that he disagrees “fundamentally” with Trump’s approach to trade policy. But regardless, the calculations are simply off: “Our findings suggest the calculated tariffs should be dramatically smaller— perhaps one-fourth as large.”
The economist acknowledged that there are legitimate arguments for reducing the overall U.S. trade deficit, which the administration is seeking to do— such as limiting debt-related risks— but said reasoning doesn’t hold when applied on a country-by-country basis.
Neiman also criticized the administration’s assumptions in its tariff model. He said the formula assumes that placing tariffs on one country won’t affect imports from others and ignores any impact on exports.
“These assumptions might hold if the target were one small trade partner,” he wrote. “But they fall apart when applied to the broad measures announced last week. A large tariff on Japanese auto parts could shift demand to Mexican imports, and vice versa. The tariffs also invite retaliation and could lead to a stronger dollar– both of which would likely reduce U.S. exports.”
The president’s “Liberation Day” tariffs sent global markets into a frenzy, with the S&P 500 entering bear market territory on Monday and the rest of the stock market continuing to plummet. Stocks remain largely unchanged on Tuesday after initially spiking during opening hours.
Similarly, Trump’s threats on Monday to impose additional tariffs on China raised fresh concerns that his drive to rebalance the global economy could intensify a financially destructive trade war. His threat came after China said it would retaliate against U.S. tariffs.
“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
Originally published on Latin Times
