CNBC host Sara Eisen and Trump administration senior counselor for trade and manufacturing Peter Navarro on August 14, 2025

Peter Navarro, President Donald Trump’s top trade official and the architect of his massively unpopular trade war and sweeping tariff plans, admits that the majority of economists do not agree with the administration’s stance that tariffs are actually “tax cuts.”

Tariffs are taxes paid by importers on goods and services as they enter the country, and those costs often make their way to consumers through higher prices. While some businesses initially absorbed the added expense when President Trump’s tariffs began, July’s wholesale prices jumped 0.9% — more than four times the 0.2% economists expected and the largest monthly increase in over three years — signaling that consumers will be bearing more of the burden.

Not according to Navarro, the Senior Counselor to the President for Trade and Manufacturing who was sentenced to prison for contempt of Congress after the first Trump administration.

“No tariffs, no tax cuts,” Navarro told CNBC on Thursday (video below), referring to the massive tax cut package— central to President Trump’s so-called “One Big Beautiful Bill”—that the administration claims will be partly offset by collected tariff revenue.

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“Are tariffs price hikes or tax cuts?” Navarro posed. “I say they’re tax cuts.”

“I mean, many, many economists would say that they’re tax hikes,” the CNBC host replied, “because ultimately, a consumer will pay for some of those increased prices.”

“Look,” a frustrated Navarro responded, “that debate has been going on since the first [Trump] term, and most economists just don’t agree with us.”

“The problem with most economists is they got it wrong the first time around, just, spectacularly wrong. So, who has credibility here? The Trump administration, or the economists?”

The CNBC host continued, saying, “we’re hearing from retail companies about passing on higher prices to the consumer. Who do you see is paying for all of these tariffs that are coming in? I mean, it’s either the people who buy the stuff, the people who make the stuff, or the people who sell the stuff.”

Navarro was quick to respond.

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“It’s the foreigners, the exporters who are heavily dependent on this market, and we see this clearly in the data,” he claimed, contrary to multiple reports that show importers and retailers are increasingly passing on the tariff costs to consumers.

“We’ve collected over $100 billion in tariffs already,” he continued. “We’ve had zero inflation from that.”

Experts disagree.

The nonpartisan Congressional Budget Office has said Trump’s tariffs will add about four-tenths of a point onto inflation, according to Reuters. Wholesale prices in July spiked 0.9%, far higher than expected.

Watch the video below or at this link.