Incoming trade advisor Peter Navarro has reassured Americans that the tariffs planned for President-Elect Donald Trump’s next term will not lead to inflationary pressures. Speaking with CNBC, Navarro pointed to the significant tariffs imposed on Chinese imports during Trump’s previous term, such as steel, aluminum, dishwashers, and solar panels. Despite fears that these tariffs would drive up prices, Navarro emphasized that they had no discernible impact on inflation. He also dismissed past warnings about inflation, recalling how critics had predicted economic chaos during Trump’s first term, only to see those fears prove unfounded.
Research supports Navarro’s claims. The Economic Policy Institute (EPI), through extensive analysis, found no link between U.S. tariffs and inflation. EPI’s study highlighted that while tariffs were implemented before 2020, inflation didn’t begin to rise sharply until March 2021. According to EPI, many factors, including government spending and supply chain disruptions, were responsible for the inflationary surge, not tariffs. This analysis is further backed by business surveys conducted after Trump’s victory, which revealed that most executives did not expect tariffs to increase costs.
Additionally, the United Steelworkers (USW) issued a statement in 2022 rejecting the argument that tariffs were driving inflation. The USW pointed out that many of the tariffs, particularly those targeting China under Section 301, had been in place for years, undermining claims that they were responsible for recent price increases.
Overall, despite concerns over tariffs, experts agree that other factors, such as government policy and global economic disruptions, play a more significant role in inflation.
