Adam Smith 'blesses' Trump tariffs

Trump's tariffs have added to economic uncertainty, but they are not inflationary per se. As Milton Friedman, the Nobel Prize-winning monetary economist, famously put it, "Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output."

Finally, uninformed media pundits often claim that businesses will simply pass along the cost of the tariffs to consumers. This is a half-truth. The other half of this half-truth is that importers, to remain in business, will be incentivized to shrink their profit margins, and foreign producers seeking to remain competitive internationally will reduce their prices.

President Trump's "America First" trade strategy, despite the outcry as being anti-free trade, seeks to reduce trade barriers. This is not without significant risk. But given Trump's recent trade agreements with the United Kingdom and China, the president's gamble seems to be paying off… bigly!