Victor Davis Hanson appeared on Fox Business Friday and took aim at critics of the Trump administration’s trade policies, particularly those who predicted economic turmoil in the wake of tariff increases.
Corporate media repeatedly predicted price hikes from President Donald Trump’s tariffs, but those forecasts have proven wrong as inflation remained steady despite the 10% duties imposed after a 90-day pause. During an appearance on “Kudlow,” Hanson said that the very economists who opposed tariffs were missing key realities about the global economy.
“I think we’re in the new frontier, Larry. We’ve never been before. We don’t know at what rate of profit our foreign policy, our foreign partners are racking up these surpluses,” Hanson told host Larry Kudlow. “Apparently, if it’s a moderate 10 to 15% tariff, they can eat that without jacking up prices and pricing themselves out of this lucrative consumer market.”
Beyond tariffs, Hanson said other major policy shifts have economists scratching their heads.
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“There’s things that are going on in progress, Larry, that we’ve never seen before. We don’t know the economic ramifications when people in the administration say there may be $10 trillion to $15 trillion in new foreign investment,” Hanson added. “The entire market capitalization of Silicon Valley is only $9 trillion. That’s a lot. So we’re talking about numbers we’ve never really encountered, and that’s besides the big, beautiful bill, taxes on remittances worldwide, taxes on endowments.”
Hanson said that the ongoing shifts in U.S. policy are entering uncharted territory. He pointed to new developments that even the experts failed to foresee. (RELATED: Steve Moore Explains How Trump’s Policies Have Changed Inflation And Americans’ Wages)
“So there’s all sorts of new developments. I don’t think the experts have expertise. We don’t know the ramifications economically when the Department of Interior or the EPA say they’re going to lessen the red tape from a two-year application process for a permit down to 21 days or what the ramifications are of a million self-deportations, many of whom are on public assistance,” Hanson said. “So I think we’re just in completely new territory that the economists thought they were familiar with, and they weren’t.”
On March 26, ABC News cited “experts” who warned that fresh tariffs would escalate the global trade war, raise consumer prices, and risk an economic slowdown. Despite these predictions, CNBC said on May 13 that inflation had eased in April, though it cautioned that prices could rise as the tariffs took full effect.
Inflation, however, continued to rise less than expected in May, reaching a four-year low. On June 20, CNN said that predictions of tariff-driven inflation had not come to fruition, pointing out that the tariff-induced price spike many economists feared had yet to materialize.
Treasury Secretary Scott Bessent said that the Consumer Price Index and Producer Price Index both rose by just 0.1% in May, according to Bureau of Labor Statistics data. Additionally, the U.S. economy exceeded expectations by adding 147,000 nonfarm payroll jobs in June, surpassing the projected 106,000.
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