White House Criticizes Fed Economists Over Tariff Study
In a heated exchange over economic research, President Donald Trump’s leading economic advisor has taken a firm stance against a recent study by Federal Reserve economists. The study, which claims that U.S. consumers and businesses are shouldering the majority of new tariffs, has sparked controversy and criticism from the administration.
Kevin Hassett, director of the White House’s National Economic Council, expressed his disapproval during a CNBC interview, labeling the research as “an embarrassment” and “the worst paper I’ve ever seen in the history of the Federal Reserve system.” Hassett further suggested that those involved in the research should face disciplinary actions.
The administration’s criticism of the Federal Reserve is the latest in a series of attacks from the Trump administration on the traditionally independent institution. This comes amid ongoing concerns regarding rising living costs, as surveys indicate persistent public dissatisfaction with the economic situation.
Several academic and governmental studies, including research from Harvard and the University of Chicago, the Kiel Institut in Germany, and the Congressional Budget Office, have echoed the findings of the New York Fed’s study. These studies collectively suggest that U.S. tariffs are largely being absorbed domestically.
The Federal Reserve Bank of New York’s research, released last week, highlights that American importers are paying almost 90% of these tariffs. The report notes an increase in average tariffs on imports from 2.6% to 13% over the past year.
While the Trump administration contends that overseas companies are absorbing the tariffs by lowering prices, the New York Fed’s findings indicate that foreign exporters have only marginally reduced their prices, insufficient to counterbalance the tariff hikes.
This incident is not isolated, as previous criticisms from the White House have targeted economists with similar conclusions. Last year, when a Goldman Sachs economist anticipated that Americans would bear more tariff costs, President Trump called for the economist’s dismissal by CEO David Solomon.
