Trump tariffs acted as tax on US consumers, raised inflation: Gita Gopinath

New Delhi: US President Donald Trump’s tariff proposals acted as a tax on US consumers, raised inflation, and had no benefit to the American economy, said former IMF Chief Economist Gita Gopinath on Wednesday.

Slamming Trump’s “Liberation Day” tariffs, Gopinath said the scorecard has been negative for the last six months.

Trump proclaimed “Liberation Day” on April 2, when he announced the most sweeping tariff hike. He declared a national emergency over the US trade deficit and invoked the International Emergency Economic Powers Act (IEEPA) to authorise sweeping tariffs on foreign imports.

He aimed to correct what he described as decades of unfair trade barriers that had hurt American producers.

However, Gopinath stated that in the last six months, the tariffs neither improved the trade balance nor boosted manufacturing in America, as claimed by Trump. It brought no benefit to the US economy.

In a post on social media platform X, Gopinath said: “It is 6 months since ‘Liberation Day’ tariffs. What have US tariffs accomplished?”

“1. Raise revenue for the government? Yes. Quite substantially. Borne almost entirely by US firms and passed on some to US consumers. So it has worked like a tax on US firms/consumers. 2. Raise inflation? Yes, by small amounts overall. More substantially for household appliances, furniture, coffee. 3. Improve trade balance? No sign yet of that. 4. Improve US manufacturing? No sign yet of that. Overall, the score card is negative,” added the Harvard Economics Professor.

India was hit with a 25 per cent tariff in July, followed by an additional 25 per cent penalty on its purchases of Russian crude oil in August.

On September 26, Trump further announced plans to impose a 100 per cent tariff on branded and patented pharmaceutical products from October 1 unless companies set up production facilities in the US.

–IANS