LARRY KUDLOW: Trump Was Right About Tariffs

• Trump's effective tariffs averaged around 15 percent, far below the 60-70 percent Smoot-Hawley levels, and generated deals with China, EU, UK, Japan and Southeast Asian countries rather than trade retaliation
• A Harvard Business School study cited shows foreign producers and non-American corporations are paying at least 80 percent of tariff costs, while the levies helped lower the budget deficit by 27 percent
• Tariffs served as a diplomatic tool, with recent example of India agreeing to stop buying Russian oil in exchange for reduced U.S. tariff rates from 25 percent

Market Summary: Trump Defends Tariff Policy, Cites Economic Benefits

Key Points:

Larry Kudlow discusses President Trump's Wall Street Journal op-ed defending his tariff policies against criticism from the publication's editorial board. Trump argues his approach has been vindicated by economic results rather than the dire predictions critics forecasted.

Main Arguments & Data:

• No Retaliation: Trump notes countries negotiated deals rather than retaliating, contradicting Smoot-Hawley Depression-era comparisons
• Tariff Levels: Effective Trump tariffs averaged approximately 15%, far below Smoot-Hawley's 60-70% rates
• Budget Impact: Tariffs helped reduce the budget deficit by approximately 27%
• Cost Distribution: A Harvard Business School study indicates foreign producers and non-American corporations bear at least 80% of tariff costs
• Trade Balance: American exports increased while imports declined, narrowing the trade deficit substantially

Deal Activity:

Agreements reached with China, Great Britain, the European Union, Japan, and Southeast Asian countries. Trump claims these deals reduced barriers for American exports and contributed to stock market rallies domestically and internationally.

Investment Claims:

Foreign investment commitments range from $9.6 trillion (official White House figure) to $18 trillion (Trump's estimate).

Recent Development:

India agreed to stop purchasing Russian oil in exchange for tariff reduction from 25%, demonstrating tariffs as a national security and diplomatic tool.

Market Implications:

The administration positions tariffs as contributing to economic growth, increased foreign investment, and improved fiscal metrics, while awaiting Supreme Court validation of using tariffs for national security purposes.