Top Trump economist derided as ‘incoherent’ on tariffs after closed-door meeting with investors

Greg McKenna

<ul>
<li>Stephen Miran, who heads the president’s Council of Economic Advisers, reportedly failed to reassure bond investors about the president’s tariff plans. In a memo authored shortly after President Donald Trump’s election victory, Miran said a stronger dollar was key to making other nations bear the burden of tax hikes on imports. The greenback, however, is down roughly 8% year to date. </li>
</ul>



The Trump administration has clear incentive to smooth things over with bond investors, who may have <a href="https://fortune.com/2025/04/09/trump-didnt-care-that-the-stock-market-was-crashing-bond-yields-were-the-pain-point-that-finally-got-him-to-pause-tariffs/">forced</a> the president to back off his sweeping “<a href="https://fortune.com/2025/04/09/trump-tariffs-90-day-pause-china-trade-war-bessent-treasury-universal-stock-market-rebound/">reciprocal tariffs</a>” earlier this month. But one of Trump’s top economists, who authored a <a href="https://fortune.com/2025/03/13/trump-economist-blueprint-tariffs-inflation/">tariff blueprint</a> read widely on Wall Street, reportedly failed to reassure several leading fixed-income traders in a meeting at the White House last week.<div class="paywall-selector"></div><div class="paywall">



Stephen Miran, chair of the Council of Economic Advisers, met with roughly 15 representatives from the likes of Citadel, <a href="https://fortune.com/company/blackrock/" target="_blank">BlackRock</a>, and PGIM on Friday at an event convened by <a href="https://fortune.com/company/citigroup/" target="_blank">Citigroup</a>, the Financial Times <a href="https://www.ft.com/content/a815323b-ae2b-4586-aec2-39dec35726f0">reported</a>. Apparently, some participants thought it didn’t go well, with sources branding Miran’s comments on tariffs “incoherent” and the Harvard-educated economist “out of his depth” in comments to the FT. “[Miran] got questions, and that’s when it fell apart,” one person familiar with the meeting told the FT. “When you’re with an audience that knows a lot, the talking points are taken apart pretty quickly.”



Miran is reportedly distancing himself from his 40-page <a href="https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf">memo</a>, titled “A User’s Guide to Restructuring the Global Trading System,” which he published shortly after Trump’s election victory in November while working at $31 billion hedge fund Hudson Bay Capital. While Miran emphasized the paper was not “policy advocacy,” it offered an argument backing Trump’s claims that other nations, rather than U.S. consumers, would effectively “pay” for tariffs, a theory <a href="https://fortune.com/2025/03/15/trump-tariffs-definition-explained/">blasted</a> by most economists.



Now, Miran leads the agency tasked with providing the executive branch with economic research and analysis. The National Economic Council, headed by Kevin Hassett, helps coordinate policy.



“Administration officials maintain regular contact with business leaders and industry groups about our trade and economic policies,” White House spokesman Kush Desai said in a statement. “The only interest guiding the administration and President Trump’s decision-making, however, is the best interest of the American people.”



The Council of Economic Advisers did not immediately respond to Fortune’s request for comment.



Markets currently seem to be experiencing a period of uneasy calm, with the S&amp;P 500 up over 10% from April 8, when the index plunged below the $5,000 mark for the first time in nearly 12 months.&nbsp;



Bond yields, meanwhile, have also steadied after a <a href="https://fortune.com/2025/04/09/bond-sell-off-wall-street-worried-liquidity-crisis-treasury-secretary-scott-bessent/">shocking spike</a> earlier this month sparked fears of a <a href="https://fortune.com/2025/04/09/bond-market-liquidity-crisis-fear/">liquidity crisis</a> and raised <a href="https://fortune.com/2025/04/08/treasuries-bond-yields-spiking-fed/">questions</a> about the safe-haven status of U.S. debt. The 10-year Treasury yield, the benchmark rate for mortgages and other common types of loans, sat at 4.17% early Wednesday afternoon, down from a high of 4.59% on April 11.



<h2 class="wp-block-heading">Dollar’s decline means Americans will feel tariffs</h2>



The <a href="https://fortune.com/article/why-is-us-dollar-sinking/">selloff</a> in U.S. assets across the board has seemingly poked holes in Miran’s argument that other nations, rather than American consumers, will be hit hardest by a dramatic hike in taxes on imports.



That’s because his vision largely depends on how tariffs theoretically make the dollar stronger relative to foreign currencies. When imports from China become more expensive, for example, less demand for the country’s goods means the value of the yuan compared with the dollar should decline. 



In a world where nations like China accept tariffs without retaliating—Beijing, to be sure, has <a href="https://fortune.com/2025/04/14/trump-trade-war-china-tariffs-imports-imbalance/">responded</a> with a 125% tax on U.S. imports—higher prices paid by U.S. importers may be offset by a cheaper exchange rate.&nbsp;



“American consumers’ purchasing power isn’t affected, since the tariff and the currency move cancel each other out,” Miran wrote in his memo, “but since the exporters’ citizens became poorer as a result of the currency move, the exporting nation ‘pays for’ or bears the burden of the tax, while the U.S. Treasury collects the revenue.”



Of course, investors have instead <a href="https://fortune.com/2025/04/11/us-dollar-losing-safe-haven-status-investor-response/">piled out</a> of the dollar, which is down 8% year to date.



“If currency offset does not occur,” Miran wrote in November, “American consumers will suffer higher prices, and the tariff will be borne by them.”



Miran also stressed the importance of preventing retaliation and tit-for-tat escalations with trading partners. Trump and Treasury Secretary Scott Bessent <a href="https://fortune.com/article/markets-stocks-howard-lutnick-amazon-tariffs-trump/">claimed</a> this week that negotiations with countries like India, Japan, and South Korea are going well. Meanwhile, Commerce Secretary Howard Lutnick said he already has a trade deal done, but could not yet name the other country.



“Economists are rooting for the penguins of the Heard and [McDonald] Islands,” Paul Donovan, chief economist at UBS Global Wealth Management, wrote in a note Wednesday, referencing the uninhabited Antarctic territory assigned a baseline 10% tariff.



<h2 class="wp-block-heading">‘Mar-a-Lago Accord’ off the table</h2>



Miran had previously suggested tariffs could set up a so-called <a href="https://fortune.com/article/mar-a-lago-accord-backers-wrong-about-us-dollar/">Mar-a-Lago Accord</a>, or an international agreement to devalue the U.S. dollar like the 1985 Plaza Accord. In the November memo, he also floated instituting a “user fee” for foreign holders of U.S. Treasuries. Critics say the latter would equate to America defaulting on its debt. 



Michael Green, portfolio manager and chief strategist of ETF manager Simplify, disputed that characterization, but that doesn’t mean he thinks such proposals make for practical policy.



“They are nice pontifications about what could potentially happen if the U.S. is able to somewhat unilaterally negotiate positions,” he told Fortune.



“What we are seeing in the tariff responses is at least the initial conditions for that are not met,” added Green, who previously founded a hedge fund seeded by George Soros and managed the personal capital of Peter Thiel. “The rest of the world’s like, ‘Why? Why would we do that?’”



The bond market <a href="https://fortune.com/2025/04/08/treasuries-bond-yields-spiking-fed/">riot</a> earlier this month provides a taste of what a ruinous flight out of U.S. assets could look like. Miran didn’t mention such proposals in a <a href="https://www.whitehouse.gov/briefings-statements/2025/04/cea-chairman-steve-miran-hudson-institute-event-remarks/">speech</a> to the Hudson Institute, a think tank, earlier this month. As in his memo, however, he insisted the dollar’s status as the world’s <a href="https://fortune.com/article/fears-of-the-u-s-dollars-decline-are-overblown-say-experts/">reserve currency</a> has hurt American manufacturing and allowed other nations to freeload off Washington’s military might.



“If other nations want to benefit from the U.S. geopolitical and financial umbrella, then they need to pull their weight,” he said, “and pay their fair share.”



Countries could do that, he said, by passively accepting tariffs, committing to buy more U.S. exports, boosting their investment in American infrastructure, and ending “unfair trade practices.”



“Fifth,” Miran said, “they could simply write checks to Treasury that help us finance global public goods.”



If Wall Street bigwigs got a similar spiel last week, some apparently left the White House less than convinced. </div>

The dollar’s decline undermines Stephen Miran’s claim that other nations, not U.S. consumers, will “pay” for tariffs.

Stephen Miran, pictured from the chest up, looks out to the left of the camera.

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