President Donald Trump’s sweeping import taxes have returned from the dead, earning the moniker “zombie tariffs,” and economists warn the chaotic policy is wreaking havoc on U.S. businesses.
Economist Justin Wolfers described the constantly shifting trade directives as a “never-ending 24/7 saga” punishing consumers instead of sparking a manufacturing boom.
The Forced Labor ‘Legal Costume’
After courts struck down previous trade levies, the administration replaced them with near-identical measures covering 99% of U.S. imports. The new legal justification is a sudden concern over foreign trading partners failing to properly police forced labor. “The latest iteration of Trump’s zombie tariffs cover nearly 99% of US imports — this time justified by the president’s sudden, deeply touching concern for forced labor around the world,” said Wolfers.
Experts argue the policy’s design reveals its true intent. Countries deemed “really bad” face a 12.5% tariff, while “merely bad” nations get a 10% rate.
“A 2.5%-point spread is hardly an incentive to reform — it’s a legal costume, and every world leader knows it,” Wolfers wrote in his Substack newsletter. Financial Times columnist Soumaya Keynes echoed this on The Fourcast podcast, noting that policing imports for forced labor is “a complete nightmare to enforce.”
‘Schrödinger’s Trade Policy’
Beyond the dubious rationale, the sheer unpredictability of the levies is paralyzing American industry. Because trade rules fluctuate, companies refuse to invest domestically.
“If a tariff that’s on on Monday is off by Tuesday, back on by Wednesday, back off by Thursday, you’re not going to pour concrete. You’re not going to build a factory,” Wolfers explained. He dubbed this “Schrödinger’s trade policy,” where a tariff is simultaneously in force and paused until someone actually checks the Federal Register.
Americans Foot the Bill
By the administration’s own metrics, the tariffs are failing. The U.S. trade deficit has barely budged, and no manufacturing boom has materialized.
Instead, everyday citizens suffer. Keynes noted it is “fairly clear that it’s American importers who are paying for those taxes.” Wolfers agreed, concluding that these “quite literally dumb tariffs” ensure the U.S. incurs all the economic costs while reaping none of the benefits.
How Have Markets Performed in 2026?
The S&P 500 index has advanced 8.09% year-to-date. Similarly, the Nasdaq Composite index was up 7.30%, and the Dow Jones gained 7.91% YTD.
The SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq 100, respectively, closed mixed on Monday. The SPY was up by 0.022% at $739.09, while the QQQ declined by 0.31% to $682.12.
Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), closed up 0.48% at $521.26 on Monday.
In premarket on Tuesday, SPY was down 0.18%, QQQ slipped 1.18%, however, DIA was up 0.74%.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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