Trade and Tariffs Declaration
A Statement on the Principles of American Prosperity
America’s prosperity is today, as it has always been, rooted in principles of entrepreneurship and voluntary economic exchange. For 250 years, the United States of America has demonstrated to the world that a people left free to innovate and produce for themselves, and for all who trade with them, will enjoy increasing abundance, higher standards of living, and greater security both economically and militarily.
Since taking office in 2025, the Trump Administration has adopted steep protective tariffs by unilateral executive decrees. These measures have injected uncertainty and chaos into the global economy through wildly fluctuating rates and ever-changing orders. Cumulatively, they impose the largest tax increase on trade in almost a century. The proponents of tariffs portray these measures as acts of ‘economic liberation.’ Instead, tariffs invert the principles of liberty that ushered in an American-led age of human freedom and prosperity.
America’s Founding Fathers rejected the bestowing of political favors and the imposition of Mercantilism. In his instructions to Virginia delegates to the Continental Congress in 1774, Thomas Jefferson urged them to stand for the American colonists’ right to “the exercise of a free trade with all parts of the world.” Two years later, the Declaration of Independence enumerated the causes that impelled those colonies to revolution, among them a protest against King George III “For cutting off our trade with all parts of the world.”
Today, we face a series of executive actions based upon assertions that:
- Misconstrue our nation’s history
- Misunderstand our nation’s current economic condition
- Misdiagnose the nature of our nation’s economic ills
- Repudiate long-standing and widely accepted economic first principles
We, the undersigned, find it necessary to offer the following corrective observations on the foundations of American prosperity, which is built upon principles of “peace, commerce, and honest friendship with all nations.”
Overwhelming economic evidence shows that freedom to trade is associated with higher per-capita incomes, faster rates of economic growth, and enhanced economic efficiency.
The American economy is a global economy that uses nearly two thirds of its imports as inputs for domestic production.
The current administration’s tariffs are motivated by a mistaken understanding of the economic conditions faced by ordinary Americans. We anticipate that American workers will incur the brunt of these misguided policies in the form of increased prices and the risk of a self-inflicted recession.
Contrary to widespread fears, U.S. trade deficits are not evidence of U.S. economic decline or of unfair trade practices abroad. Nor do these “deficits” inflict damage on the U.S. economy. Quite the opposite is true. U.S. trade deficits reflect global investors’ high confidence in the U.S. economy. And these investments, in turn, further strengthen the productive economy — and demand for the U.S. dollar.
The “reciprocal” tariff rates being threatened and imposed by the United States upon other countries are calculated using an erroneous and improvised formula with no basis in economic reality. The calculations deviate from established methods for calculating reciprocal tariffs, as specified in Section 301 of the Trade Act of 1974.
The administration’s protectionist policies repeat the catastrophic errors of the Smoot-Hawley Tariff of 1930, which was opposed by 1,028 economists. These scholars understood that protectionist tariffs would provoke a retaliatory trade war, thereby exacerbating the very same Great Depression that it was intended to solve. Rates resembling Smoot-Hawley are being imposed upon a significantly more integrated global economy, risking a similarly devastating outcome for ordinary Americans.
The “Power To lay and collect Taxes, Duties, Imposts and Excises” was constitutionally reserved to Congress as the direct and explicit representatives of the people. The April 2 tariffs have been imposed without that body’s consent, and without any intelligible guiding principle. Instead the judgment and rightful power reserved to Congress, and so to the people, has been replaced by unilateral executive decrees, justified by improvised claims of emergency under a statute that does not even contemplate authorizing tariffs. This seizure of power is unconstitutional.
The window to reverse these incoherent and damaging policies is closing. We remain hopeful, however, that sound economic principles, empirical evidence, and the warnings of history will prevail over the protectionist mythologies of the moment.
As economists and scholars in related fields, we invite the American public, and indeed the world, to join us in rejecting this misguided path of tariff-induced harm. Instead, we reiterate a commitment to the foundational principles articulated by George Washington in his Farewell Address:
“Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest. But even our commercial policy should hold an equal and impartial hand; neither seeking nor granting exclusive favors or preferences; consulting the natural course of things; diffusing and diversifying by gentle means the streams of commerce, but forcing nothing.”
On April 18, 2025, this statement was issued by:
Vernon Smith: Nobel laureate in Economic Sciences (2002), in recognition of his pioneering work in the field of experimental economics. George L. Argyros Endowed Chair in Finance and Economics at Chapman University. PhD in Economics from Harvard University
James Heckman: Nobel laureate in Economic Sciences (2000), in recognition of his research of econometric techniques, early human capital formation, and public policy impacts. Professor of Economics at the University of Chicago. PhD in Economics from Princeton University.
Phil Gramm: Former U.S. Senator from Texas, economist, and author. Played a pivotal role in shaping U.S. economic policy, including the Gramm-Leach-Bliley Act. An advocate of fiscal responsibility and deregulation. PhD in Economics from University of Georgia.
Richard Vedder: Distinguished Professor of Economics Emeritus at Ohio University. Served as a Senior Economist on the Joint Economic Committee of Congress. Researches higher education and unemployment. PhD in Economics from the University of Illinois.
Robert Higgs: Former Professor of Economics at University of Washington, and retired Senior Fellow in Political Economy at the Independent Institute. Founding editor of the Independent Review. Researches government growth and GDP accounting. PhD in Economics from Johns Hopkins University.
Benjamin Powell: Professor of Economics in the Rawls College of Business, Executive Director of the Free Market Institute at Texas Tech University, and Senior Fellow with the Independent Institute. Researches immigration and poverty. PhD in Economics from George Mason University.
William F. Shughart II: Professor of Economics at Utah State University, former editor-in-chief of Public Choice, and former president of the Public Choice Society and Southern Economics Association. Researches antitrust and the economics of government. PhD in Economics from Texas A&M University.
David R. Henderson: Professor of Economics Emeritus at Naval Postgraduate School, recipient of the Rear Admiral John Jay Schieffelin Award, and Senior Economist for the Council of Economic Advisors during the Reagan administration. PhD in Economics from UCLA.
Randall G. Holcombe: Professor of Economics at Florida State University, Senior Fellow at the James Madison Institute, and former member of the Council of Economic Advisors for Florida Governor Jeb Bush. Researches the Economics of government. PhD in Economics from Virginia Polytechnic.
Phillip W. Magness: Senior Fellow at the Independent Institute and the David J. Theroux Chair in Political Economy. Researches the economic history of the United States, focusing on taxation, trade, and economic inequality. PhD in Public Policy from George Mason University.
Donald J. Boudreaux: Professor of Economics at George Mason University. Former President of the Foundation for Economic Education. Researches of international trade, antitrust, law and economics, public choice. PhD in Economics from Auburn University and JD from the University of Virginia.
Mario J. Rizzo: Professor of Economics at New York University. Director of the Foundations of the Market Economy Program. Researches law and economics, ethics and economics, and Austrian Economics. PhD in Economics from the University of Chicago.
Peter J. Boettke: Distinguished University Professor of Economics and Philosophy at George Mason University, Director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics. Researches Austrian economics, institutional economics, and Soviet economic history. PhD in Economics from George Mason University.
Deirdre N. McCloskey: Distinguished Professor Emerita of Economics and History at University of Illinois-Chicago. Senior Fellow and Isaiah Berlin Chair in Liberal Thought at the Cato Institute. Researches economic history, economic theory, and statistics. PhD in Economics from Harvard University.
Lawrence White: Professor of Economics at George Mason University. Co-editor of Econ Journal Watch and a Distinguished Senior Fellow of the Hayek Program. Researches theory and history of banking and money. PhD in Economics from UCLA.
N. Gregory Mankiw: Robert M. Beren Professor of Economics at Harvard University. Chairman of the President’s Council of Economic Advisers from 2003-2005 and former adviser to the Congressional Budget Office and the Federal Reserve. Researches monetary and fiscal policy and economic growth. PhD in Economics from Massachusetts Institute of Technology.
Kenneth Elzinga: Robert C. Taylor Professor of Economics at the University of Virginia. Researches antitrust and has provided expert testimony for several antitrust cases. PhD in Economics from Michigan State University.
Robert Whaples: Professor of Economics at Wake Forest University. Recipient of the Allan Nevins Prize. Editor of the Independent Review. Researches American Economic History. PhD in Economics from University of Pennsylvania.
Michael Munger: Professor of Political Science, Public Policy, and Economics at Duke University. Former staff economist at the Federal Trade Commission for the Reagan Administration. Researches markets, regulation, and government institutions. PhD in Economics from Washington University in St. Louis.
Claudia Williamson Kramer: Professor of Economics at the University of Tennessee at Chattanooga. Director of the Center for Economic Education. Researches the intersection of applied economic development and political economy. PhD in Economics from West Virginia University.
Robert Lawson: Fullinwider: Chair in Economic Freedom at Southern Methodist University. Director of the Bridwell Institute for Economic Freedom and Senior Fellow at the Fraser Institute. Founding co-author of the Fraser Institute’s Economic Freedom of the World annual report. PhD in Economics from Florida State University.
Sam Peltzman: Professor of Economics Emeritus at the University of Chicago. Director emeritus of the George J. Stigler Center for the Study of the Economy and the State at the University of Chicago. PhD in Economics from University of Chicago.
Lee James Alston: Professor Emeritus of Economics and Law at Indiana University Bloomington. Research associate at the National Bureau for Economic Research and former president of the International Society for the New Institutional Economics. Researches institutions, beliefs and contracts. PhD in Economics from University of Washington.
Steve H. Hanke: Professor of Applied Economics at Johns Hopkins University, Senior Economist on President Reagan’s Council of Economic Advisers and Senior Adviser to the Joint Economic Committee (1984-1988). PhD in Economics from University of Colorado Boulder.
Robert F. Engle: Nobel laureate in Economic Sciences (2003), in recognition of his research on autoregressive conditional heteroskedasticity. Professor Emeritus of Finance at NYU Stern School of Business and Co-Founding President of the Society for Financial Econometrics. PhD in Economics from Cornell University.
Rod's Comment:
For a list of the co-signers consisting of respected economists, renowned policy experts, and influential business leaders, follow this link. The public is invited to sign the declaration and may do so at this link.
The list of economists signing this declaration is impressive, including many Noble prize-winning economists and advisors to presidents, members of prestigious foundations and professors at elite universities.
The virtue of free trade has been an accepted fact among enlightened people since first enunciated by Adam Smith in the Wealth of Nations in 1776. While there have been advocates of mercantilism and protectionism since that time, for the most part enlighten opinion understood the value of free trade. While the Democrat Party, beholden to labor unions, always had a faction advocating protectionism, for the most part, at least since World War II, there has been a bipartisan acceptance of the wisdom of free trade, and both American political parties have moved to advance it. I would like to hope that in just 90 days that decades old acceptance of the wisdom of free trade did not just evaporate.
I still think there are some open-minded people, some who even voted for Trump, who will see such a list as the above and think these distinguished economists may know more about economics than Donald Trump, Fox News TV host, and their Facebook friends.
Many MAGA folks however are a lost cause. An element of populism is distrust of experts and a belief that an uninformed opinion is as valuable as an informed opinion. Among some, there is almost a pride in ignorance and a view that whatever policy advocated by Donald Trump must be the correct view. It is a faith. As we see the results of Trump Tariffs, I hope that some will begin to lose their faith.
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