No signs of improvement: Gita Gopinath slams 'Liberation Day' tariffs

Former International Monetary Fund (IMF) economist Gita Gopinath slammed US President Donald Trump's 'Liberation Day' tariffs for raising inflation while showing no improvement in trade balance and manufacturing.

 

Noting the completion of six months of 'Liberation day' tariffs, Gopinath said: "It is 6 months since 'Liberation day' tariffs. What have US tariffs accomplished?" On April 2, Trump announced an unparalleled increase in tariffs on goods imported into the US from most of its trading partners during a ceremony labelled “Liberation Day”.

 

A 10 per cent baseline tariff was announced on imports from more than 180 countries, with a subset of 90 countries’ imports subjected to ‘reciprocal tariffs’.

 

Gopinath questions accomplishments

She further shared a list of arguments questioning the purpose and accomplishments of the tariffs. In an X post, Gopinath said, "Did it raise revenue for the government? Yes. Quite substantially. Borne almost entirely by US firms and passed on to US consumers. So it has worked like a tax on US firms/consumers." 

 

However, she added that the tariffs raised inflation, while not helping boost the manufacturing sector or improve the trade balance. She added, "Raise inflation? Yes, by small amounts overall. More substantially for household appliances, furniture, and coffee. Improve trade balance?  No sign yet of that. Improve US manufacturing? No sign yet of that." Finally, she concluded, saying that "overall, the score card is negative."

Gopinath rejoined Harvard last month

Indian-American Gopinath, who served as the first deputy managing director at the IMF, rejoined Harvard University as an economics professor in September this year. Gopinath had joined the IMF in January 2019 as chief economist and was promoted to the post of first deputy managing director in January 2022.