On April 2nd, 2025, President Donald Trump announced the most expansive set of tariffs (taxes on imports) in modern history with the United States setting a baseline tariff rate of 10% on over 180 countries. And further tariffs will be added to particular countries including China, Japan, Taiwan, and the European Union. Rarely does a global event intersect so closely with the academic work of both Enoch and Tim, so they too are stepping into unprecedented terrain in recording a bonus episode on a current event in political economy. They discuss what the tariffs will do, motivations for comprehensive tax on nearly all imports, and how we can choose better in a world with less free trade.

Errata: In the episode, I (Enoch) attempted a back of the envelope calculation of the magnitude of the tariff. I estimated 2-5% increase in costs using (10-54% tariff range on imports which are about 20% of the magnitude of US GDP). This may be in the ballpark of the increase in prices (likely an overestimate), but it is a big overestimate on the hit to GDP since this the tariffs are largely a transfer to government revenue (taxes on imports). There is a deadweight loss to the economy (transition to less-efficient production, some consumers no longer can afford specific goods), but this is going to be significantly smaller than the 2-5% number.

Credits: ⁠⁠⁠⁠⁠Drew Elliot⁠⁠⁠⁠⁠ (music) with additional thanks to the ⁠⁠⁠⁠⁠Wheaton Center for Faith, Politics & Economics⁠⁠⁠⁠⁠.
Recording Date: 3 April 2025