Former GOP Chair Jeb Hensarling Warns Trump Against Universal Tariffs, Citing Economic Risks
Credit: Alex Brandon/AP, FILE
Former House Financial Services Chair Jeb Hensarling (R-TX) has issued a stark warning to President-elect Donald Trump and the GOP Congress: tariffs are not the answer to balancing the budget. Writing in the Wall Street Journal, Hensarling argued that Trump’s proposed universal tariffs would cause significant economic harm and fail to deliver their promised revenue.
Hensarling, who now works with the libertarian Cato Institute and advises the Koch-backed Americans for Prosperity, was instrumental in passing Trump’s 2017 tax cut package during his time in Congress. While he continues to defend that policy, Hensarling emphasized that Republicans must focus on cutting both taxes and spending, rather than relying on misguided tariff plans.
“After all other possibilities are explored and exhausted, Congress will need to reduce tax expenditures significantly,” Hensarling wrote. “One possible offset that shouldn’t be embraced is Mr. Trump’s universal tariff plan.”
He referenced an estimate by the Tax Foundation, which suggests a 10% universal tariff could theoretically raise $2 trillion over 10 years. However, Hensarling cautioned that the real figure would likely be much lower due to several economic consequences.
“But the actual number would be much smaller since the estimate doesn’t account for retaliatory tariffs, inflationary effects, the harm to gross domestic product, or the inevitable litigation that could prevent Mr. Trump from imposing the tariff in the first place,” he explained.
“Given the likely collateral damage, Congress would have to think long and hard before codifying these tariffs,” Hensarling added. Trump has repeatedly vowed to enact sweeping tariffs, particularly targeting China, Canada, and Mexico.
His tariff threats have already sparked political turbulence in Canada and raised alarms among economists, who warn the policy could drive up prices for retail goods, energy, and other essentials. This isn’t Hensarling’s first critique of Trump’s economic approach. In 2022, he wrote another op-ed for the Wall Street Journal criticizing Trump’s protectionist trade policies.
“After being the party of free trade for almost four decades, some Republicans need a refresher course on the dangers of protectionism,” he argued at the time. Hensarling’s latest warning highlights a growing divide within the GOP over economic policy, as some Republicans embrace Trump’s isolationist stance while others call for a return to traditional conservative principles of free trade and fiscal restraint.
As Trump prepares to implement his economic agenda, Hensarling’s cautionary message underscores the potential pitfalls of tariffs and the need for Republicans to consider the broader consequences of protectionist policies.
