The longtime economist and financial commentator, Peter Schiff, says the U.S. is headed for serious economic trouble—and he believes the root of the problem is how trade policy is being handled.
In yesterday’s post on X, Schiff argued that tariffs are taxes and should only be imposed by Congress, as outlined in the Constitution.
“Trade policy should be made by Congress. We need deliberation, hearings, expert testimony, and debate,” he wrote.
“Then Congress can pass a bill and the president can sign it into law so everyone knows the rules and can plan accordingly.”
He pointed to Article 1 of the Constitution, which clearly gives Congress the authority to raise revenue and regulate commerce with foreign nations.
“Tariffs raise revenue,” Schiff added. “There is no mention [in Article 2] of the authority [for the president] to impose taxes, duties, or imposts, or regulate commerce of any kind.”
Critics tried to defend the strategy, claiming it was a calculated move to gain leverage. Schiff disagreed, saying, “He’s just making the mess bigger.”
Temporary Exemptions, Long-Term Damage
Schiff also called out the White House’s recent move to temporarily exempt some electronics from tariffs, only to later learn from Commerce Secretary Howard Lutnick that those same products would soon be hit under a broad new semiconductor tariff.
“Insane!” Schiff wrote.
He didn’t spare Trump’s advisors either. “Miran is a fool. Trump is surrounded by fools. They may be smart men. But when it comes to economics, they’re fools,” Schiff said, referring to economic advisor Stephen Miran.
Others on X argued that tariffs are needed because other countries tax U.S. goods. Schiff shut that down: “They don’t tax our products much. That’s fake news.”
‘Liberation’ Won’t Be Easy
In a separate warning, Schiff painted an even darker picture of what’s coming. He said the U.S. has been living beyond its means for too long, relying on cheap imports and foreign debt. That era is ending.
“We have to stop spending and start saving. We have to roll up our sleeves and go back to work,” he wrote.
“Consumer prices and interest rates will soar and our stock market will collapse. Welcome to Liberation.”
The warning came as new data showed consumer sentiment crashing.
The University of Michigan reported sentiment in April dropped 11% to 50.8—its second-lowest reading since 1952.
Survey director Joanne Hsu said pessimism is widespread and driven in part by concerns over the growing trade war.
A System Under Stress
Some economists say the back-and-forth tariffs and exemptions are creating policy whiplash and undermining long-term business planning.
Inflation expectations for the next year just hit 6.7%, the highest since 1981. The five-to-10-year outlook rose to 4.4%.
Dallas Fed President Lorie Logan recently warned that if those expectations stick, it’ll be harder to restore price stability.
“The labor market is weaker and the economic scars are deeper,” she said.
Meanwhile, Schiff blames both Congress and the White House.
He says Congress was wrong to hand over its powers through laws like the Trade Expansion Act, and that Trump is going well beyond what little authority he was actually given.
“This is no way to run a country,” Schiff said.
Schiff believes economic pain is coming. It’s the price America has to pay to get back on solid ground. The Constitution laid out a system for a reason, and we’re watching what happens when it’s ignored.