Edward Conard

Top Ten New York Times Bestselling Author

  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences provides a provocative interpretation of the causes of the global financial crisis and the policies needed to return to rapid growth. Whether you agree or not, this analysis is well worth reading.” - Nouriel Roubini, New York University; Chairman, Roubini Global Economics
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
Upside of Inequality Oxford Unintended Consequences

AI Summary. The authors estimate the modeled tariff proposals would raise $1.2tn–$4.4tn over 10 years, or 0.3–1.2% of average GDP, with foreign retaliation cutting that revenue by 12–26%. They project consumer prices initially rise 1.2–5.1%, equal to $1,900–$7,600 of lost disposable income per household, with real GDP contracting 0.5–1.4% in the medium term.

Ernie Tedeschi Yale University
Date Posted:
Is Database:
Database

.@ernietedeschi analyzes Trump’s proposed tariffs, both with and without retaliation, and projects $1.2-$4.4T in revenue over 10 years, a 0.5-1.4% decline in real GDP, and a $1.9-7.6k decline in average real disposable income per household.

How much revenue do tariffs raise, and at what cost?

Core argument: The modeled tariff proposals raise $1.2 trillion–$4.4 trillion over 10 years under conventional assumptions, equal to 0.3–1.2% of average GDP, with foreign retaliation cutting US tariff revenue by 12–26% relative to the same proposal without retaliation.

The tariff proposals modeled raise between $1.2 to $4.4 trillion over 10 years under conventional assumptions or 0.3 to 1.2% of average GDP. When other countries retaliate against US tariffs, that lowers US tariff revenue relative to the same proposal under a no-retaliation scenario by 12-26%. Tariffs also initially raise the level of consumer prices by 1.2 to 5.1%. This represents between a tenth and a third of the price level increase experienced over 2020-2023. The loss in average disposable income from these price increases would be the equivalent of $1,900 to $7,600 per household in 2023 dollars. Most of this analysis assumes conventional assumption of fixed US aggregate economic activity, we also present some partial estimates of dynamic effects on the size of the US economy from the various tariff proposals. In the medium term, real US GDP contracts by between -0.5 to -1.4%.

Takeaways by Macro Roundup® AI

  1. The modeled tariff proposals raise $1.2 trillion–$4.4 trillion over 10 years under conventional assumptions, equal to 0.3–1.2% of average GDP, with foreign retaliation cutting US tariff revenue by 12–26% relative to the same proposal without retaliation.
  2. The tariffs initially raise consumer price levels by 1.2–5.1%, between a tenth and a third of the price level increase experienced over 2020–2023, costing average disposable income the equivalent of $1,900–$7,600 per household in 2023 dollars.
  3. Partial estimates of dynamic effects, departing from the assumption of fixed US aggregate economic activity, show real US GDP contracting by 0.5–1.4% in the medium term under the tariff proposals.

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  • He Helped Trump Remake Global Trade. His Work Isn’t Done — A former U.S. trade representative argues that countries running chronic trade surpluses for decades are by definition protectionist, and backs a universal 10% tariff plus a higher tariff on China to push toward globally balanced trade over time. Alternatives include import certificates tied to exports and a charge on foreign investment in U.S. assets.
  • Only Trump Can Make America European — A European-style welfare state with government spending at 45% of GDP cannot be financed by taxing the rich alone and would require a large consumption tax, which Republican opposition has long blocked. Proposed tariffs of 10% on all imports and 60% on China are a regressive consumption tax that could open the door to a later value-added tax.
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