How economists would enact Trump’s trade goals. Hint: not like this.

With tariffs poised to take effect on Tuesday on products from Canada and Mexico, plus threats of levies on imports from the European Union, one thing is clear: President Donald Trump likes the number 25.

All of those tariffs are set at 25%, assuming no last-minute deal to lower them. Trump said on Monday that there’s “no room left for Mexico or for Canada” to make a deal before midnight.

Don’t read too much into that number, however.

“There’s nothing magical, useful, or relevant about the number 25%,” University of Michigan professor of public policy and economics Justin Wolfers tells Barron’s. “It doesn’t come from a model, from careful evaluation of the consequences of a tariff, or from history. It doesn’t solve a specific problem.”

Michael Klein, a professor at Tufts University’s Fletcher School and former Treasury Department official, agreed and said the administration’s arguments defending the proposed tariffs are “nonsensical.”

The selection of 25%, otherwise known as one-quarter of 100, seems to be simply because it’s a “big beautiful” number, to borrow the phrase Trump used to describe the House’s budget bill. Something that is easy to understand, even for the math-challenged.

Barron’s asked the White House to comment on the tariff levels.

Thierry Wizman, a global strategist at Macquarie, also sees a bit of game theory at play. If the bar is set too low, there’s no imperative to negotiate, but it can’t be so high as to be infeasible. And if Trump only achieves some of his goals, he at least creates some flexibility. “Ambiguity is a feature, not a bug,” Wizman said. “It’s intended to be an advantage.”

Trump has already raised tariffs on imports from China by another 10% on top of the up to 25% tariffs he imposed during his first term. He says he will impose another 10% levy on top of that. As for steel, Trump said in February he was reinstating full 25% tariffs and increasing the levy on aluminum to 25%. Those take effect next week. Later, Trump pledged reciprocal tariffs on any country that imposes levies on U.S. goods.

Economists tell Barron’s they aren’t necessarily opposed to tariffs, but they wouldn’t go about it this way. Tariffs are usually applied to specific products or specific industries under specific circumstances, not the type of broad levies contemplated here.

“There is no real rhyme or reason to these numbers. There is no ‘calculation’ behind them,” said Dartmouth professor and author of Clashing Over Commerce: A History of U.S. Trade Policy Douglas A. Irwin.

When the Nixon administration imposed an across-the-board import surcharge in 1971, it was 10%, Irwin said.

Generally, economists say tariffs raise prices for American consumers and companies and often have unintended consequences. Klein at Tufts created the website EconoFact in 2017. In 2020, the website published a paper examining Trump’s 25% tariffs on steel in 2018 and found they led to a U.S. manufacturing disadvantage to foreign competition.

Trump’s reasons for imposing the broad levies vary, including the desire to halt the shipment of the deadly drug fentanyl into the U.S., to bolster border security, reduce trade deficits and/or unfair competition, emphasize the importance of American-based manufacturing, and even to raise tax revenue, or at the very least make a “fortune” for the U.S.

Last week, Trump threatened the EU tariffs, citing the value-added tax on goods sold inside member countries that raises the price of American imports there. He also mentioned the EU’s regulatory crackdown on American tech companies like Google. And there was his general complaint: “We don’t like the way they’re treating our people,” Trump said. “We don’t like the way they’re treating our companies.”

Perhaps there is another reason Trump gravitates to 25%. He has heaped praise on turn-of-the-20th-century tariff policy, saying the era was a time when the U.S. was at its richest. Tariffs were high then, but that isn’t necessarily when the U.S. was at its richest.

University of California Davis professor and research associate at the National Bureau of Economic Research Christopher Meissner tells Barron’s that the U.S. was at its greatest in terms of industrial capacity and global share of output in the post-World War II period, a half-century later. In that period, tariffs were falling, Meissner says. “By the 1990s, the average U.S. tariff was less than 5% on most products and for most partners and almost zero for our main trading partners.”

Nothing major has changed between Trump’s first and second terms, economists note. Foreign unfair trade practices aren’t more unfair, Dartmouth’s Irwin says, for example. “What has changed is, of course, that Trump is back and didn’t use tariffs enough during his first term,” Irwin says.

Economists agree that a more targeted approach would be better, but nothing in Trump’s rhetoric lately suggests he’s about to shift his stance.

Jeffrey Sonnenfeld, the senior associate dean for leadership studies at Yale School of Management, tells Barron’s: “The objectives are sensible and strategic, but the targeting is imprecise and dysfunctional. He’s his own worst enemy.”

Write to Liz Moyer at liz.moyer@barrons.com