Writes Kevin Duffy:

Hi Lew,

About a month ago, Howard Lutnick said on CNBC: 

“Tariffs do not, do not, do not create inflation! Money printing creates inflation. China has the highest tariffs in the world. They don’t have inflation.”

Last year China had a trade-weighted average tariff rate of just 3%.  (See here from trade experts at the Cato Institute)

How do we explain this? 

A. Lutnick is right and the Cato trade experts are wrong. 

B. This is hyperbole meant to sell the tariffs.  All’s fair in love and trade wars. 

C. Lutnick is ignorant of the facts. 

D. Lutnick is just another lying politician. 

The problem is that this isn’t an isolated case with the Trump economic team.  It’s a pattern.  Some might call it a design flaw.