How Misapplied Research Became the Foundation for Aggressive Trade Policy

The Trump administration’s approach to tariffs has drawn sharp criticism from an unexpected source: Brent Neiman, the University of Chicago economist and former Treasury official whose own research was allegedly twisted to justify current protectionist measures. In a prominent op-ed, Neiman raised alarm about how his academic findings were fundamentally misrepresented to support policies that contradict his original conclusions.

The Numbers Don’t Add Up: A 75% Calculation Error

At the heart of Neiman’s complaint lies a critical mathematical discrepancy. His research examined tariff effectiveness based on a 95% consumer pass-through rate—meaning that importers transfer nearly all of a tariff’s cost to buyers. However, policymakers implementing the new tariff regime reportedly used a drastically different figure of just 25% pass-through, according to Neiman’s account.

This fundamental assumption gap created a cascading effect: tariff rates were set four times higher than what the actual economic data would support. What should have been a modest adjustment became an aggressive intervention, all because a critical parameter was either ignored or misunderstood.

Why Balancing Trade Isn’t as Simple as Politicians Think

Neiman pushes back against the prevailing narrative that trade deficits represent economic failure. In reality, he explains, import-export imbalances emerge from deeper structural factors: varying natural resources, competitive advantages between nations, and different stages of industrial development.

Consider a straightforward example: Americans purchase considerably more apparel from Sri Lanka than the reverse occurs. To Neiman, this reflects rational market preferences and comparative advantage, not market manipulation or unfair dealing. Viewing every trade imbalance as a problem requiring tariff solutions, he argues, fundamentally misunderstands how global commerce operates.

The Ripple Effects Nobody Planned For

Beyond the direct calculation errors, Neiman highlights overlooked policy consequences. Tariffs targeting specific countries can simply redirect purchasing to alternative suppliers rather than reduce overall imports—a phenomenon called trade diversion. Meanwhile, retaliatory tariffs from affected nations pose direct threats to American exporters.

Additionally, sustained tariff regimes tend to strengthen currency values over time. For the U.S. dollar, this creates a secondary problem: American-made goods become more expensive for foreign buyers, undermining export competitiveness precisely when protectionist policies are meant to support domestic producers.

When Evidence Gets Subordinated to Political Objectives

Neiman’s core concern transcends the specific numbers. His research was developed to inform rational policymaking grounded in economic evidence. Instead, he contends, it became a rhetorical tool—selectively cited, partially interpreted, and bent toward predetermined conclusions.

This pattern—where academic work is repurposed to legitimize decisions already made for other reasons—represents what Neiman calls a fundamental breach of intellectual integrity. The original research aimed at balanced, data-informed trade strategy; the actual application serves political imperatives.

The Broader Lesson

As U.S. trade policy continues evolving, Neiman’s experience underscores a crucial vulnerability: the gap between rigorous research and policy implementation. When academic findings are extracted from their original context and reinterpreted through a political lens, both truth and effective policymaking suffer. His case serves as a cautionary reminder that sound economic policy depends on honest engagement with evidence, not selective citation of data to support pre-existing agendas.