MW Trump's tariffs aren't wrecking the economy, supporters say. But here's what they're missing.

By Victor Reklaitis

'The damage is coming - and coming faster than some people would like to admit or acknowledge,' says one trade analyst

President Donald Trump and his supporters are pointing to the stock market's record highs and other encouraging economic indicators to argue that concerns about his tariffs are overblown.

Skeptics, however, say it's too soon to declare that all's well, especially given that higher levels of import taxes could be coming.

Trump last week highlighted in a social-media post that there have been new peaks for industrial stocks XLI, cryptocurrencies (BTCUSD), and Nvidia (NVDA) and other tech stocks XLK since he rolled out his tariff plans. In addition, Trump economic adviser Stephen Miran wrote that "there is no evidence" that the president's tariffs have "caused any economically meaningful inflation."

Related: Tariffs have played a small role so far in rising inflation: 4 things we learned from Tuesday's CPI report

However, the widespread economic concerns about Trump's tariffs haven't been wrong, veteran trade analyst Deborah Elms said, it's just "too early to say." She stressed that Trump has paused the steep tariffs he unveiled on April 2, and that ahead of that "liberation day" rollout, many U.S. companies had built up their inventories to avoid import taxes.

Companies' stockpiles "are starting to run out, and if you talk to firms, they are increasingly figuring out how to manage higher tariffs," said Elms, the head of trade policy at the Singapore-based Hinrich Foundation, which bills itself as advocating for sustainable global trade.

Elms, whose remarks came Tuesday during a panel discussion run by the National Press Foundation, also emphasized that Trump lately has threatened elevated country-specific tariffs starting on Aug. 1. Plus, she said, companies are bracing for additional sector-based tariffs that are expected to be imposed through Section 232 of the Trade Expansion Act of 1962.

"If the tariffs kick in at a higher rate as expected, as early as 15 days from now, there will be even more damage to the U.S. economy, and it is not difficult to find a lot of U.S. businesses, especially U.S. small businesses, who are increasingly struggling under tariff costs," Elms said.

"If you look at specific measures like trade flows through ports, trucking numbers, warehousing numbers, inventory purchases - a lot of those sort of faster-moving data points are suggesting increasing problems in the U.S. economy, and that's before we get to any increases in these 'reciprocal' tariffs in the next 15 days or maybe longer, but also before we get to more of these Section 232 tariffs."

"So I think the damage is coming - and coming faster than some people would like to admit or acknowledge," she added. At the same time, Elms made the point that trade only drives about 30% of the U.S. economy, so "anything that happens in trade is not going to probably destroy the U.S. economy."

Another panelist, David J. Lynch, author of a forthcoming book on the history of globalization titled "The World's Worst Bet," said he agreed with Elms, while offering a colorful comparison.

"Rendering a final verdict on the economic effects of the tariffs at this point is like the apocryphal story of the guy who jumps off the 20-story building and halfway down says, 'So far so good,'" said Lynch, who is also a global economics correspondent for the Washington Post.

"I would just say we need to be a little bit patient to assess whether a policy is or isn't working," he said.

The S&P 500 index SPX on Tuesday recently was little changed for the session. It declined modestly last week, with the slip blamed in part on tariff-related concerns.

Now read: Trump is revving up his trade war again. Here's why investors aren't panicking just yet.

-Victor Reklaitis

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July 15, 2025 15:30 ET (19:30 GMT)

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