Trump tariff policy can cause $30 trillion loss, warns former US Treasury Secretary Lawrence Summers

US President Donald Trump’s tariff policy could cause an economic loss of up to $30 trillion, or $300,000 per family of four, former US Treasury Secretary Lawrence Summers said.

Summers, who is also the Harvard president, has sharply criticized Donald Trump’s newly announced tariffs, calling them “the most expensive and masochistic” policies the US has pursued in decades.

In a series of posts on X, Summers estimated that Trump’s 10% baseline tariff on all imports and higher reciprocal tariffs for specific nations could result in an economic loss of up to $30 trillion, or $300,000 per family of four.

Summers’ Rationale for the $30 Trillion Estimate

Summers initially pegged the loss at $20 trillion, citing a 2-3% decline in US stock markets following Trump’s speech on April 3, 2025. He noted that this drop erased $1.5 trillion in the market value, but given that much of the damage was already priced in, he suggested a more accurate estimate was $4 trillion.

He explained that the stock market only captures lost corporate profits, which typically account for 10% of GDP. Applying a multiplier of five, he arrived at the $20 trillion loss figure.

However, as markets continued to react negatively, Summers later revised his estimate, stating,

“The best estimate of the loss from tariff policy is now closer to $30 trillion or $300,000 per family of four,” Summers said.

Implications of Trump Tariffs

Trump announced a baseline 10% tariff on imports with far higher levies on some trading partners, particularly in Asia. Besides China’s 34% tax, Japan got a 24% tariff, Vietnam 46% and South Korea 25%. The European Union was hit with a 20% levy.

These tariffs are in addition to the list of levies Trump has already announced, including 25% duties on steel and aluminum imports, a cumulative 20% surtax on Chinese goods and up to 25% tariffs on a range of Canadian and Mexican products.

While Trump argues these measures will boost domestic manufacturing and protect American jobs, Summers warns they could inflict severe economic harm.

Oil-Shock Type Economic Hit

Earlier, Summers said the Trump administration’s tariff hikes were set to impose an oil crisis-like shock to the economy that shrinks its productive capacity — boosting both prices and unemployment.

“This is the kind of thing you discuss in the way we would usually discuss an oil-price spike or earthquake or a drought, as a supply shock,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. “The question is mostly how much damage is going to be done.”

The “proximate” effect will be to boost prices, with effects then rippling out to include less employment and reduced investment, the former Treasury chief, who served in a Clinton administration, said.

(With inputs from Bloomberg)

Catch Donald Trump Tariff Announcement LIVE Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.