The authors of a paper that found average Americans pay the brunt of Trump’s tariffs should be “disciplined” according to a White House economic adviser.
The paper was published earlier this month by the Federal Reserve Bank of New York. It found that “90 percent of the tariffs’ economic burden fell on U.S. firms and consumers.”
The study has now drawn the ire of the Trump administration.
“I mean, the paper is an embarrassment,” White House economic advisor Kevin Hassett said during the “Squawk Box” interview. “It’s, I think, the worst paper I’ve ever seen in the history of the Federal Reserve system. The people associated with this paper should presumably be disciplined, because what they’ve done is they’ve put out a conclusion which has created a lot of news that’s highly partisan based on analysis that wouldn’t be accepted in a first-semester econ class.”
The paper examined whether tariffs resulted in lowering their prices or if the cost was simply passed along to Americans in the form of higher prices. The paper found that the cost is being passed along: “Our results show that the bulk of the tariff incidence continues to fall on U.S. firms and consumers. These findings are consistent with two other studies that report high pass-through of tariffs to U.S. import prices.”
During his interview, Hassett argued that prices were down. However, CNBC pointed out that the consumer price index was up 2.4% from a year ago.
