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Over the course of what we've done over the years, we've been so honored by the work of Harvard University, Martin Feldstein, the original support of Kenneth Rogoff, Benjamin Freeman, and others. And it devolves down to their freshman class, which is legendary worldwide X ten economic ten. Recently, Greg manke the force there and he gave the baton off to Jason Furman in the recent years. Mister Furman has public policy perspective, typically from a Democratic view, but i'd call him on the edge of bipartisan and he joins us now from Harvard. I'm going to redo your essay, Jason. It's a clinic in the New York Times here over the weekend. I'm going to get right down to the single argument here mister Trump has returned to again and again is that other countries are taking advantage of the United States. Is the Trump grievance deserved? Absolutely not.

Over the course of what we've done over the years, we've been so honored by the work of Harvard University, Martin Feldstein, the original support of Kenneth Rogoff, Benjamin Freeman, and others. And it devolves down to their freshman class, which is legendary worldwide X ten economic ten. Recently, Greg manke the force there and he gave the baton off to Jason Furman in the recent years. Mister Furman has public policy perspective, typically from a Democratic view, but i'd call him on the edge of bipartisan and he joins us now from Harvard. I'm going to redo your essay, Jason. It's a clinic in the New York Times here over the weekend. I'm going to get right down to the single argument here mister Trump has returned to again and again is that other countries are taking advantage of the United States. Is the Trump grievance deserved? Absolutely not.

I mean that essay I had in the New York Times was just what I teach in my class, to my introductory.

I mean that essay I had in the New York Times was just what I teach in my class, to my introductory.

It felt like it. I felt like that, yeah.

It felt like it. I felt like that, yeah.

And it's the same lesson I got from Marty Feldstein when I took the class decades ago. Trade deficits are not inherently bad. Imports are a wonderful thing. Trade deficits don't happen because of differential tariffs in different countries, and changing tariffs doesn't sell trade deficits. Every step of the reasoning underlying today's announcement is just completely at odds with the most basic economics.

And it's the same lesson I got from Marty Feldstein when I took the class decades ago. Trade deficits are not inherently bad. Imports are a wonderful thing. Trade deficits don't happen because of differential tariffs in different countries, and changing tariffs doesn't sell trade deficits. Every step of the reasoning underlying today's announcement is just completely at odds with the most basic economics.

Within this, Professor Furman, his professor Hassett is trying to help out the Trump administration. Kevin hasseid with a PhD from a Philadelphia school named Pennsylvania. And there's others best at the Treasury Secretary from where you sit, Jason Furman, And how alone is President Trump?

Within this, Professor Furman, his professor Hassett is trying to help out the Trump administration. Kevin hasseid with a PhD from a Philadelphia school named Pennsylvania. And there's others best at the Treasury Secretary from where you sit, Jason Furman, And how alone is President Trump?

You know, I don't know exactly what's going on inside the White House, but I know you have the cent a year ago basically saying tariffs are a bad thing, a loaded gun pointed at the head of the US economy. I know Kevin has historically been a free trader. I hope they're trying to pull things in a less bad direction. But you know, when your opening gambit is twenty percent across the board tariffs, you can move in a less bad direction and still have things be pretty.

You know, I don't know exactly what's going on inside the White House, but I know you have the cent a year ago basically saying tariffs are a bad thing, a loaded gun pointed at the head of the US economy. I know Kevin has historically been a free trader. I hope they're trying to pull things in a less bad direction. But you know, when your opening gambit is twenty percent across the board tariffs, you can move in a less bad direction and still have things be pretty.

Bad, Jason, as I understand it, as I understand the administration's perspective. They simply cite the fact that the US pays a weighted average tariff of two to three times the rate that we charge most of the rest of the world, and they want that to be leveled up. Is that kind of their argument, And if so, that seems fair level playing field? Is that a sound economic argument?

Bad, Jason, as I understand it, as I understand the administration's perspective. They simply cite the fact that the US pays a weighted average tariff of two to three times the rate that we charge most of the rest of the world, and they want that to be leveled up. Is that kind of their argument, And if so, that seems fair level playing field? Is that a sound economic argument?

First of all, those other countries are often hurting themselves their teriffs. You look at these Latin American countries that have had high terriffs. That wasn't a smart strategy to take advantage of the United States. That was a dumb strategy to stunt their economic growth. But let's do some of the numbers. Let's say you do want reciprocation. We have tariffs against most rich countries of around one or two percent. Most rich countries have tariffs against US of about one or two percent. So we don't need any new tariffs against rich countries who don't need any new tariffs against counta in Mexico. Then when it comes to China and India, if we want to even them up, we would need to raise ours by two or three percentage points, not anything like the ten twenty that we're hearing about in today's announcement.

First of all, those other countries are often hurting themselves their teriffs. You look at these Latin American countries that have had high terriffs. That wasn't a smart strategy to take advantage of the United States. That was a dumb strategy to stunt their economic growth. But let's do some of the numbers. Let's say you do want reciprocation. We have tariffs against most rich countries of around one or two percent. Most rich countries have tariffs against US of about one or two percent. So we don't need any new tariffs against rich countries who don't need any new tariffs against counta in Mexico. Then when it comes to China and India, if we want to even them up, we would need to raise ours by two or three percentage points, not anything like the ten twenty that we're hearing about in today's announcement.

All right, so that's the math. What are some of the potential unintended consequences here? People will say two that I can think of one as slower growth. Number two is higher inflation. Are those valid?

All right, so that's the math. What are some of the potential unintended consequences here? People will say two that I can think of one as slower growth. Number two is higher inflation. Are those valid?

Absolutely? I think every Wall Street forecaster had ungraded their forecast for growth and upgraded their forecast for inflation. The FED did the same thing, although the FED wasn't one hundred percent explicit about what drove their changes. It's hard to imagine there was anything else that was going on there. But to that list of two, I'd add a longer term one, which is geopolitics. The United States is a big, important country. It is not infinitely big, It is not infinitely important. China is also a really, really big player in the world. The only way we can confront China is by doing it together with allies, and if we alienate our allies. There's a lot more countries that trade more with China than with the United States. We're just going to push that further and help realign global geopolitics away from the US alliance and towards a Chinese entent.

Absolutely? I think every Wall Street forecaster had ungraded their forecast for growth and upgraded their forecast for inflation. The FED did the same thing, although the FED wasn't one hundred percent explicit about what drove their changes. It's hard to imagine there was anything else that was going on there. But to that list of two, I'd add a longer term one, which is geopolitics. The United States is a big, important country. It is not infinitely big, It is not infinitely important. China is also a really, really big player in the world. The only way we can confront China is by doing it together with allies, and if we alienate our allies. There's a lot more countries that trade more with China than with the United States. We're just going to push that further and help realign global geopolitics away from the US alliance and towards a Chinese entent.

And your morning commune this morning across Canada, across Mexico, in America, Jason Furman with US of Harvard University, we said, good morning, and Android Auto Apple CarPlay the new digital experience. And of course to all of you on YouTube, subscribe to Bloomberg Podcast and I'll get out the firm in New York Times essay. Here in a bit, Jason, I want to go to the driver of this, and I want to start with Lightheiser, who grew up in the crucible of northeastern Ohio, where as a kid he saw American steel industrial might disappear. And then we've got Navarro of LA of Irvine with his own take here to move us away from free trade. The heart of this is the Matthew teach, which is j curve in economics. There's going to be short term pain. But out there, I sound like a Linda Ronstadt song. Out there somewhere, Jason Furman, there's going to be a better American trade policy. What do they get wrong about the midterm and long term benefit of what is clearly perceived to be short term pain?

And your morning commune this morning across Canada, across Mexico, in America, Jason Furman with US of Harvard University, we said, good morning, and Android Auto Apple CarPlay the new digital experience. And of course to all of you on YouTube, subscribe to Bloomberg Podcast and I'll get out the firm in New York Times essay. Here in a bit, Jason, I want to go to the driver of this, and I want to start with Lightheiser, who grew up in the crucible of northeastern Ohio, where as a kid he saw American steel industrial might disappear. And then we've got Navarro of LA of Irvine with his own take here to move us away from free trade. The heart of this is the Matthew teach, which is j curve in economics. There's going to be short term pain. But out there, I sound like a Linda Ronstadt song. Out there somewhere, Jason Furman, there's going to be a better American trade policy. What do they get wrong about the midterm and long term benefit of what is clearly perceived to be short term pain?

Great, I mean the thing that a lot of people don't understand is when you put a tariff on imports, you're effectively putting a tariff on exports too. And that could happen because other countries retaliate with their own tariffs. It could happen because your tariffs lead to an exchange rate appreciation, which make it harder for you to export. What do we export in the i'd states, Well, a lot of that is really terrific manufacturing that's made here in America sold around the world, and we're going to have less of all of that. I don't see this as a pro manufacturing plan. We're going to raise the cost of inputs.

Great, I mean the thing that a lot of people don't understand is when you put a tariff on imports, you're effectively putting a tariff on exports too. And that could happen because other countries retaliate with their own tariffs. It could happen because your tariffs lead to an exchange rate appreciation, which make it harder for you to export. What do we export in the i'd states, Well, a lot of that is really terrific manufacturing that's made here in America sold around the world, and we're going to have less of all of that. I don't see this as a pro manufacturing plan. We're going to raise the cost of inputs.

To me, Yeah, Jason Hendrieta Trees was waiting to come on here in the politics of the moment. She just sent me an email and said, Furman, give me a dollar call. Does Jason Furman have a strong dollar week dollar outcome out of this. Let's go Robert Mundel right now, Jason Furman with the dollar.

To me, Yeah, Jason Hendrieta Trees was waiting to come on here in the politics of the moment. She just sent me an email and said, Furman, give me a dollar call. Does Jason Furman have a strong dollar week dollar outcome out of this. Let's go Robert Mundel right now, Jason Furman with the dollar.

I'm with a strong dollar. But you know, we're going to see what the announcement is today and how it compares the expectations also depends a lot on the FED. I think the FED is going to be and should be reluctant to cut rates when inflation if it goes above three percent. Sure they can say their models say it's transitory, but they're going to be pretty nervous and they should be to act on that belief, especially with inflation expectations so elevated.

I'm with a strong dollar. But you know, we're going to see what the announcement is today and how it compares the expectations also depends a lot on the FED. I think the FED is going to be and should be reluctant to cut rates when inflation if it goes above three percent. Sure they can say their models say it's transitory, but they're going to be pretty nervous and they should be to act on that belief, especially with inflation expectations so elevated.

More opeds. There are people I know, Jason sending your OpEd to their children saying, just shut up and read it. Jason Furman, thank you so much. With Harvard

More opeds. There are people I know, Jason sending your OpEd to their children saying, just shut up and read it. Jason Furman, thank you so much. With Harvard