Fed Study Vindicates Trump Trade Policy: 150 Years of Evidence Shows Tariffs Lower Inflation

A sweeping new analysis of tariff policy spanning 150 years suggests that the economic establishment may have fundamentally misunderstood how tariffs affect prices and employment, a finding with profound implications for understanding President Donald Trump’s trade policy and the proper response by the Federal Reserve.

Researchers at the Federal Reserve Bank of San Francisco examined major tariff changes from 1870 through 2020 across the United States, the United Kingdom, and France. Their conclusion challenges the conventional wisdom that dominated economic policy debates in recent years: when countries raise tariffs, prices actually fall, not rise.

“We find that a tariff hike raises unemployment and lowers inflation,” the authors, Régis Barnichon and Aayush Singh, write in their workin