"Trump’s behavior is destructive. Americans elected an infantile narcissist, and he is causing enormous harm"
According to Prof. Omer Moav, the idea behind the tariffs is not only mistaken but also a reflection of deep and dangerous economic illiteracy.
“There is a combination of ideology and ignorance here—mostly ignorance. From an economic perspective, all of the Trump administration’s arguments are complete nonsense,” says Omer Moav, a professor of economics at Reichman University and the University of Warwick, regarding the U.S. president’s tariff plan.
“Trump probably genuinely believes that tariffs are good for the U.S. economy—and that’s precisely what’s so troubling. It reveals a profound lack of understanding of basic economic principles and the implementation of harmful policies rooted in ignorance.”
According to Moav, the idea behind the tariffs is not only mistaken but also a reflection of deep and dangerous economic illiteracy.
“International trade is not a zero-sum game in which one side gains and the other loses. On the contrary, it's a win-win situation. Countries have comparative advantages, and trade allows these advantages to benefit both sides. In simpler terms, each country specializes in what it produces relatively well and buys what it needs from others. Trump wants the U.S. to become largely autarkic—to bring back industries by reducing or preventing imports. But there’s no unemployment in the U.S., so any new jobs would likely pay lower wages.”
Is this what will restore America’s greatness, as Trump claims?
“These steps go against the direction the world has been moving in. When Israel opened up to imports in the 1990s, industries where we lacked comparative advantage—textiles, footwear, pharmaceuticals, tires, electronics—were significantly reduced. Some workers lost jobs, yes, but unemployment quickly dropped again because exposure to imports enabled the growth of export industries. Consumers benefited from a significantly lower cost of living. The U.S. underwent a similar process a century ago. Now Trump wants to reverse that. This will primarily hurt Americans.”
But Trump claims the tariffs will only harm exporting countries.
“Trump says the tariffs won’t hurt Americans, but even the administration’s own calculations—used to justify the tariff rates—assume that prices will rise. Let’s say American industry sees increased activity as a result. But will it really return to the U.S. and create jobs? I doubt it. Who would invest in a factory in the U.S. when Trump could revoke the tariffs at any moment? Meanwhile, U.S. imports will fall, and exports will suffer from retaliatory tariffs.”
“American exports will be hurt”
Trump says he wants to balance trade with every country—what’s wrong with that?
“He claims that if the U.S. has a trade deficit with a country—i.e., imports more than it exports—then that country is essentially imposing tariffs on the U.S., and so the U.S. must raise tariffs in return to ‘balance’ the relationship. This is complete nonsense. A country might reasonably aim to balance trade with the world as a whole, but trying to balance trade with each individual country is irrational.
“The American economy, like any economy, creates produce. That produce is used for private consumption, public spending, and investment in infrastructure. If domestic demand exceeds domestic produce, the country must import the difference. That’s the trade deficit. To eliminate the trade deficit, the U.S. would have to either increase produce or reduce consumption or investment. Tariffs are a terrible way to address this—they also reduce exports and raise the cost of living.”
How do you respond to his claim that the world is exploiting the U.S. economy?
“Claiming that the world exploits the U.S. because it buys dollars is like me printing my own currency, ‘Omer’s Shekel,’ giving it to someone who accepts it, and then complaining that I’m being exploited. It’s a level of stupidity that’s hard to grasp. Trump’s behavior is destructive. Americans elected an infantile narcissist, and he is causing enormous harm—first to the U.S., and then to the rest of the world.”
Moav continues:
“The idea of bullying first and negotiating later is a dangerous and destabilizing approach. If this were truly a better deal for the U.S., stock markets would rise instead of crash. The crash shows that no one believes him. I think he’ll try to climb down from this tree—and he might do it by bringing in Benjamin Netanyahu. Unlike the leaders of China, Germany, or the U.K., Netanyahu is a relatively weak link. Trump might frame a symbolic concession—say, reducing tariffs from 17% to 10%—as a huge win, and his supporters will cheer. But I worry what damage Netanyahu might do to Israel’s economy in the process. Knowing him, he could promise things that will later make Finance Ministry economists hold their heads in despair.”
What might the Americans demand from Israel in return for lowering tariffs?
“They might make absurd demands like eliminating VAT on American products—which is practically impossible, since imported goods also include local costs. Even if it were possible, it would undermine Israel’s entire tax system. It could become profitable for Israeli manufacturers to export to the U.S. and then reimport their products to save 18%.
“Another option is scrapping the purchase tax on American vehicles—which would mean a budget hole of billions of shekels and a massive economic distortion. It would encourage trade diversion, favoring U.S. cars over others and punishing people who already bought non-U.S. vehicles. If anything, it would be more logical to eliminate the purchase tax entirely while raising other charges—like the annual registration fee, fuel prices, or congestion fees. If the goal is to eliminate purchase tax, it should be done gradually and coordinated with annual fees, which are the only tools that can fairly discriminate based on purchase year.”
“I lost 10% of my pension”
Is there any scenario where tariffs could benefit the U.S. economy?
“I really don’t think so. Tariffs are sometimes framed as a revenue source, but they’re one of the least efficient forms of taxation. For every dollar collected, you cause enormous economic damage. That’s why they’re a terrible tool for generating state revenue. It’s very difficult to justify their use.”
Is the damage to the U.S. economy already irreversible?
“Most of it is reversible. If Trump were to admit he was wrong and return to free trade agreements, that would be excellent. He could even negotiate better deals, with fewer tariffs. But the irreversible damage is reputational. The world now sees the U.S. president as unpredictable and unreliable. Any illusion that he acts with logic or responsibility is gone. Even if he backs down—it’s still Trump.”
At least he gives you material for new research…
“Sure—and at the same time, he wiped out 10% of my pension. Trump has done serious damage to people worldwide. Personally, I lost a significant portion of my retirement savings—and I’m not the only one.”
