For the past three months, leftist politicians and market strategists have been sounding the inflation alarm in response to President Donald Trump’s efforts to establish fairer terms with America’s trading partners around the world.

A key strategy in that agenda has been implementing new tariffs, which has sparked concerns among some economists that Americans will soon face higher prices on an array of imported goods.

But venerable economist Art Laffer offered a starkly different point of view.

As the Daily Caller reported, he even brought along a history lesson to prove his point:

“Step one, tariffs on imports do raise the price of imports. But do remember that the U.S. exports to earn the wherewithal to buy imports from other countries. So if you have a tax on imports, it’s the exact same thing as a tax on export,” Laffer told guest host David Asman. “That’s called Lerner’s symmetry theorem, exactly the same. And, therefore, what happens is all of our exportable goods and services, their prices will fall. So the increase in prices of imports is matched 100% by the fall in the prices of exports. And the two net out to be zero.”

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Laffer points to historic examples, such as the Nixon administration’s 10% surcharge, which led to a noticeable drop in inflation rates.

“If you look at it with Nixon’s, the rate of inflation declined substantially with Nixon’s 10% surcharge that it also did not get. But it just doesn’t affect trade. The Kennedy Round did not affect prices and also neither did NAFTA affect prices,” Laffer added.

Former President Richard Nixon implemented a 10% import surcharge in 1971 aimed to address trade imbalances and protect U.S. industries by imposing a tariff on all dutiable imports. While the immediate effects on inflation were mixed, the policy led the U.S. to gain a competitive edge in exports due to the weaker dollar.

Days after Trump’s “Liberation Day” tariff announcement, Laffer was quick to speak out in favor of fair trade terms:

LAFFER: “Reciprocity is the right thing to do. They should not tax our products more than we tax theirs — they shouldn’t.” pic.twitter.com/s6J7ikTmxi

— Rapid Response 47 (@RapidResponse47) April 7, 2025

The following month, he shared his belief that Trump was taking the right approach in his tough negotiation stance with Chinese trade officials:

“Doing the threat of tariffs with China was perfect in bringing China to the table to negotiate. Now it seems to materialize that Trump really is a free trader and he understands trade more than anyone does” analyse Art Laffer, ancien conseiller économique de Ronald Reagan. pic.twitter.com/BFQZ2BBlZJ

— Jean Louis (@JL7508) May 13, 2025

About a month ago, Politico reported on where Trump’s tariffs fit into the famous “Laffer Curve” by which the economist has demonstrated that lower income taxes actually boost government revenue.

Trump, along with Treasury Secretary Scott Bessent, has listed income tax relief among the many goals of the trade regime.

Unsurprisingly, Laffer sees a lot of upside in the tax cuts included in Trump’s “big, beautiful bill” — particularly with regard to the elimination of taxes on tipped income, as well as a new deduction for auto loan payments — and said it would be “very bad for the economy” if Congress fails to pass the measure.

But “there is no doubt in my mind that trade protectionism will hurt the economy a lot,” he added.

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“The question is: What will Trump’s actions do?” Laffer said. “My guess is they’ll make for freer trade, not for more protectionism. I think he really wants [other countries] to come to the table and reduce their tariffs on us, and that would be wonderful, and we should have those tariffs lowered.”

“Will he actually do that? I don’t know.”

Here’s a clip of Laffer’s latest remarks:

This is a Guest Post from our friends over at WLTReport.

View the original article here.