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Before November last year, Stephen Miran was a little known economist, but a week after President Trump’s election he published a paper that set the financial world on fire. “A User’s Guide to Restructuring the Global Trade System” calls for a weaker US dollar and big tariff hikes.
Now he’s working from the White House as President Trump’s new Chair of the White House Council of Economic Advisers. He sat down for a live interview with Saleha Mohsin, talking about tariffs and currency policy.
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Here is a lightly edited transcript of the conversation:
Saleha Mohsin: Before November last year, Stephen Miran was a little known economist. He served as a senior advisor at the US Treasury Department during the first Trump administration. Until recently he worked as a strategist at an investment firm, with a focus on global economic policy. But a week after the election, Miran’s work blew up: specifically, a 41-page paper called “A User’s Guide to Restructuring the Global Trade System,” which went the finance world’s equivalent of viral. Big players like Apollo Management and JP Morgan Chase had a lot to say about Miran’s report. That spawned a frenzy of interpretation of Miran’s thoughts on tariff hikes, weakening the US dollar, and a so-called “Mar-A-Lago Accord” on currency intervention. And then:
Tim Scott: I’ll now swear in the nominees. Will you all please stand and raise your right hand?
Mohsin: Stephen Miran was before a panel of Senators vetting him to serve as the chair of President Trump’s Council of Economic Advisors.
Stephen Miran: It is an honor surpassing any I ever expected to be here before you today as President Trump’s nominee to lead his Council of Economic Advisors …
Mohsin: That council, the CEA, gives advice to the president on international and domestic policy.
Miran: My view is that reindustrializing America is imperative not only for economic reasons, but for national security.
Mohsin: Less than two weeks later, Miran’s nomination was confirmed. I’m Saleha Mohsin, and this is the Big Take DC from Bloomberg News. Today on the show: I talk with Steve Miran about his ideas on how the US could reshuffle the economic world order and how he thinks Trump’s tariffs could actually work.
BTV: … We get the view on the economic outlook from the White House now with the Chair of the Council of Economic Advisors, Stephen Miran, sitting down here in our Washington DC studio with our colleague, Bloomberg’s Saleha Mohsin. Saleha.
Mohsin: We have Stephen Miran here with us. Stephen, you are one of the top economists at the White House right now. Welcome to Bloomberg. You’re serving in this role at a tenuous moment for the economy. We saw last week the Federal Reserve, officials there, cut economic growth outlook, also citing inflationary risks, mostly from Trump’s trade policy. And I want to know, do you think that the Fed has gotten the effects of tariffs on the economy wrong?
Miran: Thanks, Saleha. It’s great to be here, so thanks for having me. Look, yeah, I think that folks, that a lot of folks, you know, have got the effects of tariffs wrong. I think there’s, there’s quite a bit that people miss about tariffs. The number one point that I’d make about tariffs is a general point about economics, which is that when you think about any economic policy, a tariff, a tax, anything else, right? The economists believe that the party that bears the, the burden or the benefit of that policy is the party that’s more inflexible. Because if you’re flexible, you can change your behavior to avoid the costs. And so think about it this way, if you were buying a house and, you know, the town that you’re looking at raises property taxes, right? You say, okay, maybe I’m gonna look at the house in the next town over. Right? Whereas — so you can adjust your behavior, you’re flexible. Whereas the seller of that house is inflexible, they already own it, so they have to drop their selling price. Right? So in this example, economists would say, okay, the seller of the house ends up bearing the increase in the property tax. And you have to think about tariffs the same way. US consumers are flexible. We have options. We can produce stuff at home. We have a variety of countries we can import stuff, we can substitute into home production. Whereas countries that sell to the United States are inflexible. They’ve only got the United States to sell to, there’s no alternative. So they’re the ones who will bear the burden of this, of these tariffs, which means that there’s gonna be very limited pass through into downside economic risk or into higher prices. So I think that a lot of folks have got that wrong.
Mohsin: But even Trump and his advisors including — and your colleagues, Elon Musk, Scott Bessent, the Treasury secretary, and others are signaling a no pain, no gain concept here, that for a little while things could get bumpy in the economy.
Miran: Yeah. So there are some risks in the economy, but I think those risks predominantly derive from the transition from an economy which was primarily government driven to an economy that’s primarily private sector driven. And that might contribute to make things bumpier and less robust in the short run. And just to give you one number, that’s a great example of that. Is if you look at the shares of the share of jobs created in 23, 24, 2023, and 2024, so the second half of the Biden administration when Covid is over, and it’s really just a result of, of Biden administration policies, 73% of all jobs created in those two years were due to government and government adjacent sectors. By government adjacent, I mean sectors like education, sectors like healthcare, social assistance. These are sectors of the economy that derive a very large, or maybe even in some of them, the majority of their financing, ultimately from the taxpayer through direct transfers or subsidies. So three quarters of jobs created in the last couple of years came from basically, you know, sort of government expenditures and taxpayer subsidies. So it is a brittle economy as we transition away from that to the private sector.
Mohsin: But the Fed, you know, Fed officials are correct then that there will be at least short term pain as tariffs kick in?
Miran: So I don’t think that there’s gonna be material, short-term pain from, from the tariffs. I think the short-term pain is coming from the reorientation of the, of the economy, from the government to the private sector. Now of course, you know, as you know, the tariff situation is still developing and the president will decide what he wants to, the president will decide what the tariffs are on, on April 2nd, and, and has been very clear telegraphing that.
Mohsin: Let’s talk about the tariffs, what’s coming down April 2nd, that the president has tasked his advisors and his team with an immense job here to come up with these tariffs for next week. What can you share about the contours of this? Should we expect country by country tariffs? Sectoral tariffs being announced?
Miran: Sure. So, look, you know, it’s important to calculate a whole variety of things when you’re thinking about non tariff. Sorry. When you’re thinking about tariffs, about fair and reciprocal tariffs. Those include outright tariff rates that other countries charge us. And they also include non tariff barriers, right? Ways that countries prevent us selling our exports into their markets through means other than tariffs, through not opening their markets through intellectual property theft or, or lack of enforcement through currency changes, through regulatory differences that prohibit our products from entering their markets, and you have to consider this entire host of things, right? And so the, the, the dimensions of analysis can get really big, really fast. Now, that goes at odds with another principle, which is that simplicity is great, right? And so, you know, simplicity is a virtue when you, when you think about these things, in one, in one sense, because it makes it more difficult for other countries to game. Now the situation is developing, you know, the, the team and the President are entertaining, are entertaining options. It would be wrong for me to get ahead of that. But, you know, we’ll find out soon.
Mohsin: Coming up after the break, I ask Steve about the November paper that launched him into the spotlight… and whether we should expect what he calls “a Mar-A-Lago Accord” on currency intervention sooner rather than later.
Mohsin: Stephen. The other thing that a lot of people here at Bloomberg have been talking about is this paper that you wrote in November after elections, but before you were nominated to be CEA chair. The title of this paper was “A User’s Guide to Restructuring the Global Trading System” and it has caused a stir. You talk about some unorthodox policies, like revaluing US gold stocks, applying a user fee to treasuries and a new global currency accord? Can you tell me how much of this is in the works?
Miran: Yeah. So I’m glad you brought that up ’cause this paper seems to have taken on a life of its own, against all my intents. Look, I’m pretty clear in that paper that it’s a catalog of available options and, you know, it’s a recipe book and I’m trying to evaluate how, uh, useful or not useful or easy or difficult, those various recipes are to make. Some of them are easy, some are tough, some are, you know some are filling, satisfying meals and some will leave you hungry again in a half an hour. And my goal in that paper was to provide an evaluation of options so that a cost benefit analysis of, of risks and rewards so that whoever was making the decision, you know, sort of could have that available if, if helpful. To be clear, you know, I’m not the chef, right? The President is the chef and he’s been very clear, very clear that he’s focused on fair and reciprocal tariffs. He couldn’t be clearer. And so anybody who’s, anybody who’s thinking that something that I, that I included in a catalog in November is the source of is, is what the policy agenda is now, you know, I think, I think that’s wrong.
Mohsin: So tell me, a currency accord, a Mar-a-Lago Accord, is that currently in the works?
Miran: The president’s been very clear that he is focused on fair and reciprocal tariffs. And you know, that’s what the, what the team is working on.
Mohsin: Is it a 2026 goal to do a currency pact?
Miran: I mean, look, I would look at it this way. I would look at it as the United States has been running very significant trade and current account deficits for a very long period of time. Those are very costly to us economically. They’re very costly to, disproportionately costly to, to some parts of the country that are reliant on manufacturing, reliant on exports, and there’s a variety of means of, of trying to address that problem. Right. The President’s been very clear that he wants to start with tariffs. And that’s what, that’s what we’re doing, right? We are starting, we are starting with tariffs. We have been moving in tariffs. We are going to continue moving on tariffs. April 2nd is around the corner. And that’s the sole focus right now. Could it be something that, uh, is entertained down the road? Sure, it could, but right now the president is focused on tariffs.
Mohsin: In the paper you talk about an overvalued dollar. Is that still the case?
Mohsin: Look, another thing that I think most of the economics profession gets wrong about tariffs is that all of these models of international trade all assume that trade eventually balances, and that if you run a trade deficit, the dollar will weaken and that will restore the trade deficit to balance. If you run a trade surplus, the dollar will strengthen and that will restore the trade surplus to balance. And so therefore the currency will adjust to balance trade over time. And there’s no need for tariffs because the economy is basically self-adjusting, self equilibrating, as an economist would say. However, it seems very clear that that’s not the case. We’ve been running current account deficits for five decades now, and they only get worse in dollar terms and, and percentage terms lately. So, you know, I think it’s very clear that that standard model of the economy that assumes away the need for tariffs is wrong because we have been running this persistent, those persistent current account and trade deficits. If the dollar were able to weaken to equilibrate trade, then we wouldn’t have a lot of the, uh, to balance trade deficits, then we wouldn’t have a lot of the problems that tariffs and, and other policy agents are designed to address because US exports would be more competitive on the global stage and we wouldn’t be as cheated by other countries.
Mohsin: Trump has talked a lot about maintaining the dollar as the world’s reserve asset. But also there’s a desire for a weaker exchange rate. Aren’t these dueling forces?
Miran: So there’s a variety of means which you can take to try to address the problems in demand, which the allocation of demand across countries, which leads to the persistent trade deficits that we have in the United States and that we have had for decades, in the United States. There are various means of doing so, right? Some of these means go down different paths, right? And some of these means would be dollar positive. Some of these means would be dollar negative, and the, again, the point of the, of the essay that I wrote in November was to evaluate the variety of paths. And just because there are many ways to get to an end result doesn’t mean you want to take all the paths at once. I mean, you can’t cut yourself in half.
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