Stephen Moore helped construct the financial case for Donald Trump. Now, he’s tearing a bit of it down. In an interview with Fortune, the previous presidential financial advisor and economist who actually wrote the guide on Trumponomics mentioned Trump’s tariffs have damage GDP and pushed costs increased: “Tariffs are taxes—and taxes are bad.”
Moore, a Heritage Basis economist, defined that import taxes have straight elevated prices for U.S. companies and customers by “clobbering” medium-size producers. He famous an article within the Wall Avenue Journal that mentioned espresso is the commodity with the one quickest development in costs proper now.
“Well, guess what? We put a 50% tariff on coffee,” Moore mentioned. “So, yeah, the coffee price went up.”
Impartial information suggests tariffs are already pressuring costs and manufacturing. In a Could 2025 New York Fed survey, many uncovered companies reported passing tariff prices on to clients, and a few third of producers mentioned they totally handed on these prices. In the meantime, the Yale Funds Lab discovered new tariffs have led to a 2.3% enhance within the total U.S. value degree and a $3,800 loss in buying energy per family (in 2024 {dollars}). On the manufacturing facility entrance, September’s ISM Manufacturing PMI got here in at 49.1, marking a seventh straight month of contraction, and a few producers are actually attaching 20% surcharges to offset tariff-induced enter value will increase.
On the similar time, nevertheless, most of the recession predictions economists made earlier this yr haven’t but come to cross. When Trump imposed sweeping new tariffs in April, mainstream financial forecasts warned of catastrophe: Goldman Sachs put the percentages of a recession at 45%, whereas Nobel laureate Paul Krugman wrote, “a recession seems likely” following “the biggest trade shock in history” (referring to the inventory market rout following Trump’s “Liberation Day” tariffs announcement). Some analysts went so far as to warn of stagflation and supply-chain collapse. However 9 months into the commerce conflict, the U.S. economic system—whereas uneven—has not fallen into the sort of disaster many anticipated.
“The prophets of doom were, once again, completely wrong,” Moore mentioned. “The Biden economists who said Trump would destroy the economy have all been contradicted by real world events.”
Nonetheless, Moore credit this to different elements of the Trump agenda—power growth, deregulation, and tax cuts—calling them “net positive” and arguing they outweighed the drag from tariffs. When pressed on whether or not tariffs had been definitely worth the financial hit, Moore answered merely: “No.”
He framed his break on commerce as a focused financial correction, not a political departure.
“I’m a big fan of Donald Trump,” he mentioned, whereas nonetheless labeling tariffs a expensive mistake.
Moore’s new concern: Trump is naming costs—and transferring markets
Tariffs weren’t the one crimson flag Moore raised. Requested about Trump’s more and more direct interventions in pricing, Moore hesitated, then acknowledged concern.
Trump declared Thursday that he’ll cut back the price of Ozempic from $1,300 to $150, triggering a selloff in Novo Nordisk and Eli Lilly shares throughout Friday buying and selling. Earlier that day, he additionally claimed he “worked [his] magic” in making a deal to carry down beef costs.
Does that sort of intervention fear Moore, a famously libertarian economist?
“A little bit, yeah,” he mentioned. “That’s not the way markets are supposed to work.”
The direct value interventions are a part of what some critics have warned is a broader shift in Trump’s financial strategy, which appears to have fewer traits of free-market capitalism and extra of a system of state intervention that resembles “state capitalism.”
As Wall Avenue Journal columnist Greg Ip famous, Trump is extending political management into the non-public sector in ways in which transcend crisis-era bailouts or focused industrial coverage. Trump has repeatedly singled out CEOs, pressured firms over enterprise choices, and used federal energy to affect industries, from metal and autos to tech and media.
His administration has additionally demanded fairness stakes, “golden shares,” and income kickbacks from non-public companies in change for market entry or approvals, elevating issues amongst critics about political favoritism and authorities intrusion into company technique.
Moore made clear that value declarations should not a part of conventional conservative financial philosophy. He emphasised that predictable coverage—not advert hoc offers—is what offers companies confidence to take a position.
“The best policy is always to have a system that benefits everyone,” he mentioned. “It shouldn’t pick winners and losers.”
