By Dr. George Calhoun
Executive Director of the Hanlon Financial Systems Research Center at Stevens Institute of Technology
Friends, family, students, colleagues, random acquaintances, delivery people — even my Amtrak conductor (who caught me reading the Financial Times) — suddenly, everyone seems eager to know what I think about tariffs. (As though I were an expert in trade policy, which I am not.) The topic has been on the boil for a while, but the multi-trillion dollar stock market meltdown of the past week has raised the level of urgency. So far, I’ve hedged my responses, saying things like “it’s too soon to tell” or “it’s a complex issue.” I need a better answer — which this column will begin to offer.
In thinking about tariffs, I want to resist the impulse to go along with two tendencies I see playing out in the media commentary: (1) a tendency to react to and echo the latest headlines, and especially the political pronouncements, which are often not very thoughtful; and (2) a readiness to accept conventional wisdom and recite “lessons” of economic mythistory which may no longer be relevant (see below).
When it comes to tariff policies, let us start with the fact that there are things we know and things we don’t know — or better said, things about which there is general agreement and things that generate intense disagreement. Certainties, and Uncertainties. It is useful to distinguish them.