Episode summary
President Trump’s Economy: Boom, Bust, or Business as Usual?
Wall Street Week
· · 10 min · Hosts: Chrystia Freeland, David Westin · Guests: Jason Furman
Summary
Jason Furman argued that the U.S. economy under President Trump looks more like a continuation of the prior year than a dramatic boom or bust. He said growth has remained steady, unemployment has stabilized, and any productivity pickup from AI is still only tentative. On that basis, he pushed back on Trump’s claims of plunging inflation and a roaring economy, calling the past year “a perfectly good year” rather than a turning point.
Furman said tariffs are already showing up in the data by lifting prices in goods such as furniture and consumer electronics and shaving a bit off growth. He argued the bigger drag may be uncertainty: shifting tariff policy can delay investment and encourage companies to move activity overseas, even if the new legal regime is somewhat more predictable than the old one. He also dismissed the idea that tariffs could replace the income tax, saying the numbers are nowhere close.
The discussion also covered the Supreme Court’s rejection of key tariffs and the prospect of refunds. An analyst said that, if the tariffs are ruled unlawful, roughly $88 billion to $100 billion could eventually be refunded, though the process could be straightforward or highly burdensome depending on how the administration handles claims, with small businesses likely most exposed.
Key takeaways
- Furman said the economy has been steady, not exceptional, with 2025 tracking 2024’s pace and unemployment basically stable.
- He argued tariffs have added a meaningful amount to inflation and subtracted a bit from growth, especially in goods like furniture and electronics.
- Furman said tariff uncertainty can delay investment and push some activity overseas, even if the Supreme Court ruling makes the regime more predictable.
- He called the idea that tariffs could replace the income tax “ludicrous,” saying tariff revenue is far too small.
- An analyst said unlawful tariffs could imply roughly $88 billion to $100 billion in refunds through at least the end of August.
Notable quotes
“-To a first approximation, the year since Donald Trump became president, economically, was very similar to the year before he was president”
“It's actually been a perfectly good year”
“-I think it has subtracted a bit from growth and added a meaningful amount to inflation”
“-That's ludicrous. Income tax collects over $10 trillion over the next decade, and the tariffs are in the hundreds of billions per year”
“if the court rules that the tariffs were illegal from the get-go, then the tariffs must be refunded to those that have paid them”
How the episode opens
We start with that big story of a duel between the Supreme Court and President Trump. -In a few moments, I will sign a historic executive order instituting reciprocal tariffs on countries throughout the world. Reciprocal, that means they do it to us and we do it to them.
They're all coming in over the next week. We're making deals with all of them. And I said, if we don't make a deal, then we're going to tariff them an extra 5, 6, 7, 8 percent, whatever the difference is, and we'll take it that way.
The Supreme Court's ruling on tariffs is deeply disappointing. And I'm ashamed of certain members of the court, absolutely ashamed, for not having the courage to do what's right for our country. Westin: That played out this week when the president gave his State of the Union address with the members of the court right up front.
Jason Furman of Harvard takes us through the ramifications of the conflict for the economy and what likely comes next. So Jason, we heard from President Trump this week in the State of the Union address, and he sort of gave a State of the Economic Union. And among other things, he said we have plunging inflation, we have rapidly rising incomes, and the economy is roaring like it's never roared before.
Is he right? -To a first approximation, the year since Donald Trump became president, economically, was very similar to the year before he was president. It's actually been a perfectly good year.
It's not the horror that Democrats might have predicted, but it's certainly not any sort of turning point that Donald Trump was trying to brag about either. Westin: As an economist looking at the U.S. economy right now, what are the strong points?
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- inflation
- tariffs
- policy uncertainty
- unemployment
- ai investment
Watch the episode
Watch “President Trump’s Economy: Boom, Bust, or Business as Usual?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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