Donald Trump’s tariff czar Peter Navarro insisted that with “Liberation Day” approaching, the president’s sweeping round of tariffs on foreign goods shouldn’t be seen as an import tax but rather the “biggest tax cut in American history.”
“The message is that tariffs are tax cuts, tariffs are jobs, tariffs for national security, tariffs are great for America, tariffs will make America great again,” the White House senior counselor for trade and manufacturing declared on Fox News Sunday.
The Orwellian assertion, which runs counter to what nearly every economist has said about tariffs' impact on the American consumer and economy, was met with wholesale criticism that spanned the political spectrum.
“They think you are stupid,” Pradeep J. Shanker, a contributor for the conservative National Review magazine, noted about Navarro’s claim.
Throughout his interview with Fox News anchor Shannon Bream, who pressed him to explain his reasoning, Navarro insisted that the revenue brought in from tariffs on cars and auto parts would be so massive that it would eventually be passed on to consumers in the form of tax cuts.
“We’re gonna raise about $100 billion with the auto tariffs alone,” he said. “In the new tax bill that has to pass — it absolutely has to pass — we’re gonna provide tax benefits, tax credits, to people who buy American cars.”
In addition, the top White House aide and recently released convict claimed that the president’s other promised tariffs — which will be unleashed on April 2, what Trump is touting as “Liberation Day” — could bring in as much as $6 trillion over the next decade. Trump, meanwhile, has reportedly urged his White House team to be even more aggressive during this trade war as he ponders a universal tariff.
On top of that, the president has declared that he “couldn’t care less” if his tariffs lead auto manufacturers to jack up car prices, claiming that if they do, it just means “people are gonna buy American-made cars.” When presented with recent polls finding that 69 percent of Americans felt tariffs would make products more expensive, Navarro shrugged off those concerns and told Bream, “Trust in Trump.”
Despite Navarro’s pie-in-the-sky claims about the impact of widespread import taxes, economists warned that consumers should expect price increases across the board, which could also serve to slow down the economy. Meanwhile, the stock markets continued to slide on Monday morning in anticipation of the upcoming tariffs.
“The economics does not suggest that at all, and I'm not alone,” KPMG chief economist Diane Swonk told ABC News about Navarro’s declaration. “It's the economic consensus that actually, in fact, car prices will go up, and what we tend to see is some of it will be absorbed in margins, and some of it will show up in layoffs as higher costs go up in terms of production.”
Art Laffer, a conservative economist who has been repeatedly cited by Trump, warned that the tariffs on auto imports could add roughly $5,000 to the cost of vehicles and hurt American automakers abroad. “A 25 percent tariff would not only shrink, or possibly eliminate, profit margins for U.S. manufacturers but also weaken their ability to compete with international rivals,” Laffer, who Trump honored with a Presidential Medal of Freedom award in 2019, wrote.
Jessica Riedl, a senior fellow at the conservative think tank Manhattan Institute, said that despite what Navarro was selling on the Trump trade policy, his promise of raising $600 billion a year in revenues from tariffs means the White House would “impose the largest peacetime tax increase in America history outside of World War II.” Additionally, according to Riedl, “middle and lower income earners” would be “hit hardest” by the increases.
Washington Post chief economics reporter Jeff Stein also noted that Navarro’s claim about tariffs raising $6 trillion over the next 10 years reflects the Post’s reporting that “Trump wants to go absolutely enormous on the tariffs, regardless of short-term economic consequences.” Stein also wondered if, based on Navarro’s expectations, this would represent “the biggest tax hike in US history.”
Social media was absolutely lit up with reactions to Navarro’s assertion that “tariffs are tax cuts,” much of which centered on how the Trump adviser had gone “full Orwell” with the narrative he was pitching.
“What is objectively dumber: Trump won the 2020 election or tariffs are tax cuts?” Rep. Ro Khanna (D-CA) tweeted, while Zeteo columnist John Harwood simply called Navarro’s proclamation an “exceptionally stupid message.”
“Navarro is both the dumbest economist in America, and the most influential,” centrist economics blogger Noah Smith noted. “We're being ruled by the worst people.”
“Tariffs are taxes. To claim that tariffs are tax cuts is nonsensical. Whose taxes are cut by tariffs? Journalists, please ask him to explain such claims,” former U.S. Ambassador to Russia Michael McFaul declared about Navarro’s Fox News appearance.
Right-wing radio host Erick Erickson, in the end, suggested that the Trump White House was doing the same thing that conservatives had criticized the Biden administration of doing when it comes to the economy.
“I understand Peter Navarro’s argument that tariffs now can help for tax cuts later, but this gets to my same criticism of Democrats who like to use tax credits to incentivize behavior,” he posted. “The tariff will be felt now. The tax changes won’t come till later. People still reeling from Bidenomics’ inflation will get no relief from Trumponomics.”
