Economists pitch ‘ultimate reciprocal’ trade plan for Trump on tariffs
While Wall Street reels from the latest market turbulence sparked by President Donald Trump’s global tariff standoff, two prominent economists say the president may be in a stronger position than many think.
"He’s gotten them [foreign nations] into a position where they’re going to lose their access to the U.S. market if they don’t redress these types of inequities that they’ve done," said Art Laffer, a former economic advisor to President Reagan, during an appearance on "Varney & Co.," Tuesday.
Laffer, along with fellow economist Steve Moore, co-authored a Wall Street Journal op-ed titled, "A Win-Win Exit Strategy for Trump on Tariffs." The piece outlines an approach they believe could deescalate the growing trade war and even lead to broader economic gains.
Their proposed solution: President Trump should deliver a globally televised address calling on all countries to eliminate tariffs and industry subsidies, pledging the U.S. would do the same in return.
"This would be the ultimate reciprocal tariff policy," the economists wrote.
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"President Trump and the U.S. would regain the moral high ground in trade disputes. It would be enlightening to see which supposedly ‘free trade’ nations accept Mr. Trump’s challenge."
The economists argue that such a move is not out of character for Trump. At the 2018 G7 Summit in Quebec, Trump made a similar offer, saying: "No tariffs, no barriers. That’s the way it should be. And no subsidies."
Laffer and Moore claim that, after that offer, many countries scrambled to respond, exposing which "free trade" nations were unwilling to follow through.
National Economic Council Director Kevin Hassett has reportedly confirmed an uptick in foreign outreach following the latest round of tariffs.
"Right now we’re managing a massive number of requests for negotiations," he told Fox's Dana Perino, Tuesday.
Moore, speaking on "America’s Newsroom," praised Trump’s negotiation tactics,
"I’m just amazed by Trump at what a great negotiator he is. So, he’s basically putting pressure on these countries … It’s almost like a game of musical chairs, you don’t want to be the one left standing. And that’s why I think you’re seeing these flurries of calls."
Still, the economists warn that timing is critical.
"If those tariffs go in and stay in for a long time … that would be disastrous for the U.S. and the world economy," Laffer said.
But if the president can successfully negotiate a shift in global trade policy?
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"He might win a Nobel Peace Prize," Moore said.
"If Donald Trump can pull this off, and get these countries to reduce their tariffs, it’s good for everybody. The world economy will be better."