Economist Brett Neiman reveals that Trump’s sweeping new tariffs were based on a misinterpretation of his research, leading to inflated rates that have triggered global market turmoil and raised serious concerns about trade policy, economic stability, and executive overreach.

University of Chicago Economics Professor Brett Neiman was left stunned when he learned the Trump administration invoked his research to leverage his lofty worldwide tariffs

In a stunning revelation that has sent shockwaves through economic circles, a prominent economist has expressed his disbelief after discovering that President Donald Trump utilized his research to justify sweeping tariffs on numerous countries.

Brett Neiman, a distinguished professor of economics at the University of Chicago and a former Treasury official, found himself at the center of a controversy that could have far-reaching implications for the global economy.

Neiman’s confusion began when he saw Trump unveil a significant tariff regime, which the president dubbed “Liberation Day,” imposing hefty tariffs on imports from 60 nations.

The economist’s initial reaction was one of bewilderment: “How on Earth did they calculate such huge rates?” His questions were soon answered when the Office of the U.S.

Trade Representative released a methodology that cited an academic paper authored by Neiman and three other economists.

However, Neiman was quick to clarify that the administration had grossly misapplied their findings.

The crux of the issue lies in the erroneous addition of a 25 percent rate to the formula that Neiman and his colleagues developed. This miscalculation resulted in tariffs that were, according to Neiman, four times higher than they should have been.

“Where does 25 percent come from?” he questioned rhetorically, expressing frustration over the misrepresentation of his work. He asserted that their research suggested the tariffs should be significantly lower—perhaps even one-fourth of the imposed rates.

 

He wrote that he was confused when the president held up his sign showing the amount of tariffs he would impose on 60 countries last Wednesday in what Trump dubbed Liberation Day

 

The economic fallout from these tariffs has been immediate and severe. Markets around the world have reacted negatively, with European stocks experiencing their worst one-day decline since the onset of the COVID-19 pandemic.

Japan’s Nikkei 225 index plummeted nearly 8 percent, while the broader Topix index fell by 7.7 percent.

Economists are now sounding alarms about a potential global recession, with betting markets indicating a 62 percent chance that the U.S. will enter a recession this year—an increase from just 39 percent prior to the tariff announcement.

Neiman’s critique extends beyond the mathematical errors; he challenges the very rationale behind Trump’s tariff strategy. He argues that the president’s goal of reducing trade deficits with major trading partners is misguided.

“Is this a reasonable goal? It is not,” Neiman stated emphatically, explaining that trade imbalances are a natural part of international commerce.

He likened the situation to a personal anecdote, quoting Nobel laureate Robert Solow: “I have a chronic deficit with my barber, who doesn’t buy a darned thing from me.” This analogy underscores the absurdity of equating trade deficits with unfair competition.

As the economic climate grows increasingly tense, calls for a reevaluation of Trump’s tariff policies are gaining traction. High-profile figures, including billionaires Elon Musk and Bill Ackman, have voiced their concerns, urging a reassessment of the current strategy.

Musk, in particular, has advocated for a “zero-zero” tariff deal with the European Union, proposing that both the U.S. and the Eurozone eliminate tariffs on industrial goods entirely.

This proposal aims to foster a more favorable trading environment and alleviate some of the pressures on the global economy.

 

Neiman claimed the Trump administration erroneously added a 25 percent rate into its calculations - meaning that all of the tariffs imposed on countries across the world are four times higher than they should be

 

Despite the mounting pressure, Trump has remained steadfast in his approach, dismissing suggestions to pause or reconsider the tariffs. He has characterized the imposition of tariffs as a necessary response to years of perceived exploitation by foreign nations.

“We have been ripped off and taken advantage of by many countries over the years and can’t do it anymore,” he declared, emphasizing his commitment to a tough trade stance.

However, the backlash against Trump’s policies is not limited to economists and business leaders.

Some Republican senators are advocating for legislation that would require the president to inform Congress of upcoming tariffs within 48 hours and seek congressional approval for their implementation.

This measure reflects growing unease within the party regarding the potential economic repercussions of Trump’s unilateral decisions.

In a legal twist, a libertarian group has filed a lawsuit challenging the legality of Trump’s tariffs, arguing that they exceed his powers under the International Emergency Economic Powers Act.

The suit, filed on behalf of a Florida-based company reliant on imports from China, contends that the president’s actions could set a dangerous precedent for executive power.

 

Economists across the world now worry of a global economic downturn

 

As the situation unfolds, the implications of Trump’s tariff policy continue to ripple through the economy.

Neiman’s warning that these tariffs could lead to the highest average tariff rates in a century is resonating with many economists who fear the long-term consequences for consumers, firms, and the broader stock market.

In a bid to maintain cohesion within his political base, Trump has urged supporters not to “be a PANICAN,” coining a term for those he perceives as weak or overly cautious in the face of economic challenges.

His rhetoric reflects a determination to push forward with his agenda, regardless of the growing dissent among economists and business leaders.

As the world watches closely, the unfolding drama surrounding Trump’s tariffs raises critical questions about the future of international trade and economic stability.

The stakes are high, and the ramifications of these policies could shape the global economic landscape for years to come.