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

Breitbart ^ | November 14, 2025 | John Carney

[Red Badger]

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 working paper released this month.”This goes against the predictions of standard models, whereby CPI inflation should go up in response to higher tariffs.”

The finding arrives at a politically charged moment. As the Trump administration has implemented tariff increases averaging 18 percent on U.S. imports in 2025, mainstream economists warned of a significant inflationary spiral. The Federal Reserve officials have repeatedly said they have hesitated to cut interest rates because they expect tariffs to push up prices.

More recently, several Fed officials have said that they think the central bank should not cut interest rates further due to what they believed would be inflationary pressures from tariffs.

But the historical evidence suggests those concerns may have rested on shaky theoretical foundations not backed by evidence.

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TOPICS: Business/Economy; History; Military/Veterans; Society
KEYWORDS: r

[philman_36]

But the historical evidence suggests those concerns may have rested on shaky theoretical foundations not backed by evidence.

What a nice way of saying they did nothing more than make a wild ass guess (WAG)
with both hands and grabbed their own ankles instead of the own backsides.

[Vaduz]

50 Years of Evidence Shows Tariffs Lower Inflation

DUH

[central_va]

Raises taxes unemployment? MAYBE IN CHINA BUT NOT HERE.

[central_va]

How can buying less imports raise unemployment in the USA? That makes no sense.

[central_va]

I am pro tariff but there is a lot of kooky stuff in the poorly written article. Both parties were pro tariff in the early 20th century is one inconsistency.

[aMorePerfectUnion]

[Georgia Girl 2]

Surprise, surprise, surprise. 🙄

[spintreebob]

No inflation but unemployment per this article.

There is no such thing as a free lunch. Every action has a price.

[ConservativeMind]

“We find that a tariff hike raises unemployment and lowers inflation,”

That's not the most stellar positive thing, there, unless we dump the H-1Bs and the illegals.

[nickcarraway]

This is a weird way of putting it. Trashing your economy into fiery crater will also lower inflation.

Hey, if we put people like Mamdani in charge, eventually our economy will be damaged so badly, you won't have to worry about inflation, because there will be deflation.

There's a certain amount of balance to this. If you have a strong economy, there will be some inflation. If you have a weak economy, there wont be, and bad enough you get deflation. Of course, if you keep interest rates very low for a long time, you will get inflation.

[nickcarraway]

Exactly. A lot of times with low inflation, or deflation, were recessions or depressions. It would be more helpful to track inflation vs. economic growth.