[Trump 100 Days] "Tariff Shock Undermines U.S. Trust... Hits Workers Who Voted for Trump"

Tariffs Hit American Workers Who Voted for Trump First
Economic Shock Expected Within Three to Six Months
"Tariff Revenues Will Fall Short of Expectations Due to Trade Decline and Economic Slowdown"
Financial Markets Put the Brakes on Tariff Overreach
U.S. Trust and Leadership Weaken

"Within his first 100 days in office, Trump severely damaged the United States' global standing and leadership by adopting an aggressive, deal-oriented approach to trade and by disregarding existing agreements and commitments. The workers he promised to help have instead been left with greater economic insecurity, and these negative effects will begin to materialize in earnest within three to six months."

Kimberly Clausing, UCLA Law School Professor of Tax Law and Policy

Kimberly Clausing, UCLA Law School Professor of Tax Law and Policy and a leading authority on international trade and taxation who served as Deputy Assistant Secretary for Tax Analysis at the Treasury Department under the Biden administration, stated in an interview with Asia Economy on the 27th (local time) that she was "quite dismayed" by President Donald Trump's trade policy, adding, "My assessment of Trump's first 100 days is very negative."

President Trump, who championed "America First," pursued domestic policies centered on banning illegal immigration, restructuring the federal government, abolishing diversity policies, and rolling back environmental initiatives. At the same time, he delivered an unprecedented shock to the international trade order. While he has pushed for a ceasefire in the Russia-Ukraine war and negotiations over Iran's nuclear program, it is undoubtedly his tariff policy that has caused the greatest turmoil worldwide.

Tariffs Hit American Workers Who Voted for Trump First... Economic Shock Expected Within Three Months

Professor Clausing sharply criticized President Trump's indiscriminate imposition of tariffs as "very foolish." She warned that the trade policy, pushed forward by Trump?who was elected with the support of workers in the Rust Belt and branded himself as the "tariff man"?would ultimately hit workers and the broader middle class first, rebounding as "the largest tax increase in a generation."

She noted, "The United States is now engaged in the largest tax war in a generation. Workers are facing new economic anxieties, and consumers will bear the burden of what amounts to a massive tax increase through higher prices." She also projected that the tariff shock would "disrupt supply chains and restrict market access for U.S. exporters, significantly weakening the U.S. manufacturing base itself" from the perspective of producers such as businesses.

As concerns about tariff-induced stagflation (rising prices amid economic stagnation) intensify on Wall Street, Professor Clausing expressed greater concern about the possibility of a recession than about inflation. She said, "An economic slowdown due to tariffs is inevitable, and the likelihood of a recession is high," predicting, "Negative shocks will materialize as soon as three months from now, and at the latest within six months." Regarding inflation, she said, "It is likely to be a one-off increase," but warned that the economic slowdown would "make it much more difficult for the Federal Reserve to manage the macroeconomy."

Mutual Tariff Negotiations Expected to Stall... "Tariff Revenues Will Fall Short of Expectations"

Professor Clausing assessed that U.S. tariff policy and the global trade order are now mired in "huge uncertainty."

Regarding trade negotiations between the United States and other countries during the 90-day grace period following the mutual tariffs that took effect on the 9th, she predicted, "The outcomes are likely to be superficial and rhetorical," and added, "It is difficult to expect any substantive agreements." She also pointed out the high risk that the tariff war will expand beyond steel and automobiles to semiconductors and pharmaceuticals, as President Trump has signaled.

On the possibility of additional tariff exemptions or deferrals, she predicted, "Such measures will heighten political turmoil and are likely to benefit individuals or companies with close ties to President Trump." In the United States, there has been analysis that Trump's exclusion of certain electronics such as smartphones and PCs from the mutual tariffs was due to his relationship with Apple CEO Tim Cook, whose company manufactures iPhones in China.

However, she predicted that there is a possibility for the U.S.-China trade conflict to ease. She cautiously forecast, "Currently, trade relations between the United States and China are virtually at the level of a trade embargo," and "Both countries have strong incentives to avoid a catastrophe."

She also warned that tariffs would not achieve Trump's policy goals, such as offsetting revenue losses from income tax cuts. Professor Clausing emphasized, "Due to reduced trade and economic activity, tariff revenues will fall short of expectations," adding, "Tariffs are regressive and distortionary taxes that will have a severe negative impact on the middle class economy."

Financial Markets Put the Brakes on Tariff Overreach... The Biggest Problem Is the Weakening of U.S. Trust and Leadership

She viewed the recent turmoil in financial markets?including plunges in U.S. stocks, bonds, and the dollar?as a positive development in that it has put the brakes on President Trump's tariff overreach. Following the "Sell America" phenomenon, President Trump has made more conciliatory statements regarding his tariff policy.

Professor Clausing noted, "There are signs within the Trump administration of efforts to scale back aggressive policies." However, she cautioned, "Trump has long supported tariff policies," and "His policy moves are mercurial, and views within the administration are divided, so it will take time to know the outcome."

To countries abroad, including South Korea, she said, "I am very disappointed in Trump's approach to close partner countries such as Korea," and advised, "Other countries should expand trade with partners outside the United States and protect their own economies through fiscal expansion policies."

Professor Clausing identified the weakening of U.S. trust and global leadership?exposed by the turmoil in financial markets?as the most serious problem caused by President Trump's trade policy.

She expressed concern, stating, "Trump's actions have severely damaged America's standing in the global economy, and it is still unclear how deep and long-lasting that damage will be." She went on to warn, "Furthermore, Trump is undermining the stability of American institutions and intimidating universities. Most importantly, by diminishing America's appeal as a destination to visit, study, and work, he is threatening the core sources of innovation, entrepreneurship, and economic growth by failing to attract talent."

About Professor Kimberly Clausing

Kimberly Clausing, UCLA Law School Professor of Tax Law and Policy, is a globally recognized economist in the fields of trade and international taxation. She served as Deputy Assistant Secretary for Tax Analysis at the Treasury Department under the Biden administration from 2021 to 2022, leading policy operations. Her research primarily focuses on the impact of government policies and corporate decisions on the global economy, and she has also led research on free trade. She has conducted economic policy research in collaboration with organizations such as the International Monetary Fund (IMF), the Brookings Institution, and the Tax Policy Center. She holds a bachelor's degree in economics from Carleton College and earned her master's and doctoral degrees in economics from Harvard University.