When a model swings from loss to gain on its own assumptions, it isn’t proving tariffs failed—it’s exposing the limits of the model.
By Peter Navarro | American Greatness | April 16, 2026
The anti-tariff priesthood has delivered yet another paper purporting to expose the folly of Trump’s trade strategy. Exhibit A is the latest National Bureau of Economic Research (NBER) study from Pablo Fajgelbaum and Amit Khandelwal, which tells us that Trump’s 2025 tariffs pushed U.S. duties from 2.4 percent to 9.6 percent, that about 90 percent of those tariffs were passed through into prices paid by U.S. importers, and that the net welfare effect ranged from a 0.13 percent loss of GDP to a 0.10 percent gain.
That is the tell. When your headline conclusion runs from minus to plus depending on assumptions the authors themselves admit are unresolved, you do not have a verdict. You have a shrug dressed up as science.
The paper offers a few careful concessions, just enough to establish an air of fairness. Yes, the tariff picture was more complicated than the daily media hysteria suggested. Applied tariffs were often lower than statutory headline rates, a majority of imports still entered duty-free, and retaliation outside China was limited.
Those are important facts, and they cut against much of the panic-porn that dominated coverage in 2025. But once those concessions are out of the way, the authors do what tariff critics always do: they force a strategic policy through a static model built to find short-run distortion and miss long-run gain.
The paper expressly says its framework is static, has exogenous trade deficits, and lacks monetary frictions and uncertainty. In other words, it is built to capture short-run price distortions, not strategic industrial realignment.
That matters because the Trump tariff program was never mainly about squeezing one more decimal point of static consumption welfare out of a one-period trade model. It was, and is, about revenue, bargaining leverage, supply-chain resilience, reducing strategic dependence on China, and stopping not just China but much of the rest of the world from cheating America.