Originally published as an article on X. 

You don’t need to be a Wall Street analyst to know something’s off. Now we’re getting confirmation in the numbers: the U.S. economy is slipping. The Atlanta Fed’s GDPNow forecast projects a -2.8% contraction for the first quarter of 2025—a warning sign blinking in red. That’s not just an abstract data point; it’s a real-world signal that businesses are pausing investment, job growth is stalling, and families are feeling the strain.

This sharp economic slide didn’t happen in a vacuum. It followed President Trump’s announcement of sweeping new tariffs, part of an aggressive trade agenda that’s injected a new layer of uncertainty into an already fragile economy. Since early March, when trade rhetoric ramped up, the GDPNow forecast has remained in the red. Adding fuel to the dismal situation, the S&P 500 is down nearly 17% from its recent high, with about $11 trillion in stock market losses since Trump's inauguration. For working Americans, that translates to delayed pay raises, fewer job opportunities, and higher costs for nearly everything. We’re living with the consequences now, and unless we change course, it will get worse.

Now, instead of correcting course with stable, pro-growth policies, President Trump’s sweeping new tariffs—10% minimum tax on all imports, including 54% on Chinese goods and 20% on European products—are the latest attempt to reshape trade policy by brute force. But rather than strengthening our economy, this strategy injects more uncertainty, stokes inflation, and raises prices on everyday goods. Families already stretched by high grocery bills and energy costs are now seeing those same dollars buy even less. If you’re a parent trying to save for your child’s education or a retiree budgeting carefully, these policies make your life harder.

To truly put America first, we must lower spending, make the Trump tax cuts permanent, reduce regulations, and engage our allies in free trade that benefits everyone.

After Trump announced a much more complicated "reciprocal tariff" strategy, markets immediately sounded the alarm. Stocks fell sharply, oil prices dropped, and investors scrambled for safety. Prices for essentials—from electronics to groceries—are expected to surge. One estimate suggests a future iPhone could cost $2,300. Tariffs aren’t a clever negotiating tactic—they’re taxes on Americans. They hit hardest at the gas pump and checkout counter, especially for low-income households living paycheck to paycheck.

For many, this policy may seem like economic patriotism—fixing trade deficits and restoring American jobs. But let’s be clear: this isn’t economic strategy; it’s economic theater. As Milton Friedman said, “We call a tariff a protective measure. It does protect; it protects the consumer very well against one thing. It protects the consumer against low prices.”

Trade isn’t a weapon. It’s a bridge that connects people to more opportunity, innovation, and peace. When we trade freely, costs fall, choices expand, and economies grow. History shows that nations that trade are less likely to fight. A tariff war, by contrast, makes us poorer and isolates us from global partnerships that build stability.

Instead of projecting strength, these tariffs project fear—fear that American businesses can’t compete unless Washington rigs the game. That fear leads to retaliation, not respect. Remember the Smoot-Hawley Tariff Act of 1930? It helped trigger a global trade war and started and exacerbated the Great Depression. We could be heading down a similar road, and this time, families already battling inflation may not have the margin to endure it.

Many believe trade “hollowed out” the Rust Belt. But that story misses the real culprits: automation and innovation, along with federal, state, and local policies and strong labor unions that made it hard to do business. High taxes, strict labor mandates, and bloated bureaucracies drove jobs away—not just overseas, but to states like Texas and Florida with better policies. In fact, manufacturing output has hit record highs in recent decades; the jobs moved—not because of trade, but because of bad policies that made staying put too expensive.

If we want to bring jobs back or offer better ones, we must make America more competitive—not more combative. That starts with making the Tax Cuts and Jobs Act permanent. These tax cuts boosted wages, investment, and growth. Letting them expire would hurt workers and businesses. We must also slash reckless spending. Our national debt is over $36 trillion and growing. Reducing federal spending helps shrink trade deficits, too, by boosting national savings and reducing reliance on foreign capital. Fiscal discipline at home leads to strength abroad.

We also need to cut red tape. Entrepreneurs are burdened by nearly $2 trillion in regulatory costs each year. Cutting that burden means more startups, more jobs, and more innovation. It means unleashing the energy and ambition of the American people.

Instead of punishing Americans and our allies with tariffs, we should lead them in building a more open global economy. Trade deals like the Trans-Pacific Partnership would have enhanced America’s influence in Asia and set higher standards for international commerce. By walking away, we ceded ground to China. It’s time to reverse course. More trade agreements—built on reducing trade barriers—can reinforce our leadership and lift incomes at home and abroad.

To Trump supporters who want more prosperity and fair trade: you’re right to want a better deal for America. But the way to get there is not by taxing ourselves or stoking uncertainty. It’s by bringing our house in order—lowering barriers, not raising them. Let’s compete by unleashing the best of what America offers—not by closing our doors.

Americans deserve policies that unite prosperity with liberty. Tariffs concentrate power in the hands of politicians who pick winners and losers. That’s not capitalism—it’s economic control. True prosperity comes when people are free to trade, innovate, and grow. That’s what makes America exceptional.
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Let’s not build walls around our economy. Let’s build bridges that connect us to the world and a more prosperous future for all. Tariffs won’t make America great again. But economic freedom will.

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Originally published at NBC News with my quote below.

​President Donald Trump has repeatedly criticized the nation’s trade deficit, which the Commerce Department reported Wednesday reached a new record high. 
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But the same Commerce report showed the value of American exports had also hit a new record, indicating there’s still strong demand for U.S. goods and services abroad.

A trade deficit simply means a country is importing more than it is exporting. As the Congressional Research Service reported in 2018, Trump’s fixation on reversing the deficit “contrasts with the views of most economists.”
Maintaining a deficit usually says little about the state of a country’s economy. The U.S. trade deficit reflects strong domestic growth and consumption, especially relative to the weaker economic performance seen in many parts of the world, including most other Western developed countries. 

“Trade helps us to be better off,” said Vance Ginn, an economist and adviser in Trump’s first term.  Whether it is sourcing goods that the U.S. no longer produces or which can be produced more cheaply elsewhere, large American import levels reflect strong demand from consumers for stuff — and the U.S. economy as a whole generally benefits from this arrangement, Ginn said.

Countries with large trade surpluses, such as China, Russia and Saudi Arabia, tend to be heavy exporters of natural resources with relatively lower rates of domestic consumption. 
Trump has indicated he may prefer the U.S. to more closely resemble this group of nations. In his executive order last week laying out his new administration’s trade priorities, “investigating the causes of our country’s large and persistent annual trade deficits in goods” was the first item listed. 

Asked what Canada and Mexico needed to do to avoid sweeping new 25% tariffs, Trump said Sunday, “They have to balance out their trade, number one. We have deficits with almost every country — not every country, but almost — and we’re going to change it.”

Because Americans tend to buy more and save less than those ib other countries, a deficit persists. Economists are nearly unanimous that Trump’s call for tariffs to reverse the deficit would raise costs for U.S. consumers — and the president himself recently acknowledged their imposition would likely lead to “pain” for some time.  
  
Trump often cites William McKinley, a former U.S. president who, as a congressman, helped implement massive trade duties, as his lodestar for how he believes the U.S. economy should be run. McKinley was indeed successful in raising large sums of money for the U.S. government several decades before the first national income tax was implemented. 

However, by the time McKinley was sworn in as president in 1897, the country’s transition from an agrarian to an industrialized economy had accelerated, and he ultimately abandoned the use of tariffs in favor of reciprocal trade agreements. 

There may have been a point in the 1980s and 1990s when America’s widening trade deficit began to cause problems again. In testimony before the U.S. Senate in 1998, Robert Scott, an economist with the left-leaning Economic Policy Institute, said trade imbalances had likely contributed to 2 million manufacturing job losses between 1979 and 1994, with hundreds of thousands resulting from the 1992 North American Free Trade Agreement alone — a pact Trump repeatedly criticized before replacing it with the United States-Mexico-Canada-Agreement in 2018. His latest volley of tariffs would contravene that very deal, which is up for review in the middle of next year.

Along with the lost jobs was the effect on wages, Scott said. Since 1979, Americans’ inflation-adjusted earnings have risen only by 12%, even as the size of the overall U.S. economy has grown exponentially during the same period. Wealth inequality, too, accelerated during this time.

The Wall Street Journal’s right-leaning editorial board has noted the “contradictions” of Trump’s economic policies. 
“Mr. Trump likes tariffs and wants more of them, but he also wants a weaker dollar to promote U.S. exports, and the two desires are in conflict,” it said this week. 

Most economists, left and right, believe that at this point, it would be extremely difficult to bring back a meaningful number of manufacturing roles — and that those that still exist currently benefit from lower trade barriers and, in some cases, recent federal programs designed to prop up key industries like semiconductor manufacturing. 

“It would be better if Mr. Trump and his crew dropped the strong dollar-weak dollar chatter and focused on a stable dollar,” the Journal’s editorial board wrote. “That’s what inflation-weary Americans elected the President to do.”

​Major changes are underway in the federal government with Trump in office. He's tackling the size and scope of government, which is a long overdue move. We’re also gaining more insight into President Trump’s plans to impose tariffs, which could raise American prices. Now is the time for bold reforms—whether it’s slashing government spending, championing free markets, or encouraging innovation to maintain our global competitiveness. In this episode, I also explore a Texas school choice bill, a new competitor in the AI sector, calls to abolish the CFPB and much more. Thanks for joining me in this episode of "This Week's Economy."

​For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.