As America’s trade policies and fiscal stability face growing scrutiny, Harvard economics professor Jason Furman ’92 and Senator Rick Scott (R-FL) on April 23 took the stage at the Harvard Institute of Politics’ JFK Forum to discuss the future of the U.S. economy. Against a backdrop of rising tariffs, mounting national debt, and geopolitical tensions with China, Furman and Scott debated different approaches to trade and fiscal policy, with stakes ranging from inflation at home to growing risks of global economic fragmentation.
Furman is the Aetna Professor of the Practice of Economic Policy jointly at the Harvard Kennedy School and Harvard College. He served as a senior economic advisor to former President Barack Obama for eight years, including as chairman of the Council of Economic Advisers from 2013 to 2017. Scott, who won his seat in 2018, is now serving his second term in the Senate. Before he acceded to Congress, Scott served as the 45th governor of Florida.
President Donald Trump has reignited trade tensions by imposing sweeping new tariffs on imports from China, Mexico, Canada, and other major trade partners. His administration’s aggressive use of tariffs—including “reciprocal” levies—escalated global trade wars and raised concerns about high consumer prices and economic instability.
Supporters of the new tariffs have argued that they protect domestic industry, safeguard jobs, and give America leverage in international negotiations. Critics have warned that they raise consumer costs, disrupt global trade, and trigger retaliatory tariffs targeting key American exports, including agricultural products and industrial goods.
On April 2, the Trump administration imposed a 10% baseline tariff on all imports, with higher rates for specific countries, including a 145% tariff on Chinese goods. Higher rates for dozens of nations were paused for 90 days on April 9.
After his Jan. 20 inauguration, Trump declared at a rally, “I always say ‘tariffs’ is the most beautiful word to me in the dictionary. Because tariffs are going to make us rich as hell. It’s going to bring back our country’s businesses back that left us.”
This hardline approach to trade is also part of a broader shift in Trump’s foreign policy strategy, emphasizing greater self-reliance.
“There are two things [Donald Trump] is telling the world: if you want the American military to be your backstop, we are going to be your backstop; we are not going to be your front line of defense,” Scott explained. “You’re going to have to put up your own money, you’re going to have to put your own men and women at risk before you’re going to get American troops and American money.”
“No. 2 is [that] the American worker is not going to be disadvantaged any longer,” he continued. “I think part of it is going to be tariffs, part of it is going to be all the stupid rules that are out there that make it difficult for any American worker to be able to sell their products and services in another country.”
Scott warned that growing tension could deepen the economic divide between allies and adversaries. Economists have long cautioned that aggressive tariff policies can escalate into broader political conflicts, and many analysts today advise that rising protectionism could harden divisions between global blocs.
“I believe that we are slowly going to divide ourselves into two economies: we are going to have the ‘bad guys’ economies of Russia, China, Iran, and North Korea,” Scott said. “And we’re going to have the ‘good guy’ economies of the people who believe in free markets, and free trade, and freedom, and democracy.”
The Trump administration has not yet imposed tariffs on Russia or North Korea. This past Thursday, the White House defended its decision to exclude these countries—along with Russian allies Cuba and Belarus—from the latest round of tariffs. According to a report from “The Hill,” a White House official stated that these four nations “are not subject to the Reciprocal Tariff Executive Order because they are already facing extremely high tariffs, and our previously imposed sanctions preclude any meaningful trade with these countries.”
In the case of China, the White House framed the tariffs as a tool to protect U.S. national security—citing China’s failure to curb the flow of fentanyl and unfair economic practices.
“China is more complicated,” Furman said. “[The U.S. and China] are both free trade when it comes to Europe. China is a competitor, a rival in a way that those economies aren’t. How do you think we should be dealing with them?”
In response, Scott argued that China’s economic growth poses a direct threat to American national security. “Here’s my theory about China: I don’t want to go to war, I don’t like war,” he said. “But I think the only way we don’t go to [war with] China is if their economy is demolished. If they have the money, we’re going to war.”
However, rather than simply supporting higher tariffs on Chinese goods, Scott advocated for a more extreme alternative.
“My belief is we should do [zero] trade with China. We should say today: you guys lie, cheat, and steal,” he said. “Think about their precursors that kill 70,000 Americans a year with Fentanyl, they’ve never complied with the World Trade Organization, they don’t comply with the terms of Most Favoured Nation. There is not one thing they’ve complied with.”
Most Favored Nation status, a core principle of the World Trade Organization, requires countries to treat all their trading partners equally by offering the same trade terms, including low tariffs and minimal barriers.
The United States and China have maintained strong trade ties since China’s economic reforms in the late 1970s, with relations expanding dramatically after China joined the WTO in 2001. Today, China is America’s third-largest trading partner, with total trade in goods and services between the two countries exceeding $700 billion annually.
While Scott advocated for a full financial withdrawal from China, many economists have raised concerns about the potential costs of such a move. As China has emerged as a global manufacturing hub over the past four decades, the U.S. and Chinese economies have become deeply intertwined, with American companies benefiting from cheap labor and a large consumer base.
A complete decoupling could disrupt industries dependent on Chinese manufacturing, drive up costs for American businesses and consumers, and prompt broader instability in global markets.
“What is more important to me than anything else is my freedom,” Scott said. “I mean the freedom of this country, the freedom to do what I want to do. That is more important to me than anything else. We do not have a choice but to decouple.”
Furman then redirected Scott from economic relations with China to mounting financial challenges in Washington. “You were a very fiscally responsible governor. I did not look up the numbers, but since you’ve been in Washington, the debt has gone up an awful lot,” said Furman. “It’s projected to be 20 trillion dollars over the next decade, and Congress just passed a budget resolution that the Committee for a Responsible Federal Budget says will add another 7 trillion dollars… What’s going on?”
Scott emphasized that in Washington, fiscal transparency is hard to find. “Most people in the Senate don’t want to talk about numbers,” he said. Over the past five years government spending has increased by 53% even as the population grew by only 2%. “We are now running $2 trillion-dollar-a-year deficits,” he said, adding that the federal government must refinance nearly $9.2 trillion in treasuries this year, in addition to issuing another $2 trillion in new debt.
Much of the recent surge in government spending stems from pandemic-era relief programs, increased defense budgets, and rising costs for programs like Social Security and Medicare. At the same time, tax revenues have not kept pace with spending, contributing to deficits and forcing the government to rely heavily on borrowing.
As part of those negotiations, Scott laid out some of his own priorities, including increased funding for border security and defense.
“We’re going to put $175 billion dollars up to deal with the border. There will be 100 billion dollars that will go into defense to ‘plus up’ defense because they are worried about…China,” he said.
But he also stressed that the government must make tough decisions about entitlement programs like Medicaid.
“How many of you think that you should be able to get free healthcare if you don’t even want to apply to work and you’re able-bodied? You think you should get free healthcare? I don’t,” he said.
President Trump has repeatedly promised not to cut Medicaid, Medicare, or Social Security, emphasizing he plans only to target fraud or waste. However, despite his assurances, Trump endorsed a House budget resolution proposing $880 billion in cuts to Medicaid and Medicare over the next decade. His administration also supports work requirements for Medicaid recipients to reduce spending, though data shows that most recipients already work or are otherwise exempt. These shifts in healthcare policy have fueled broader frustrations among voters, especially those worried about losing access to critical benefits.
Throughout the discussion, Scott repeatedly referenced a growing chasm between Washington and the concerns of everyday Americans. “There is a disconnect between what Washington is talking about and what the public wants,” he said, arguing that recent elections showed voters are focused on border security and on inflation, not on the partisan battles that dominate headlines.
Inflation, in particular, remains a pressing issue for many middle-class Americans, especially as concerns mount that new tariffs could only exacerbate rising prices. For Scott, the blame for persistent inflation falls squarely on two sources: Congress and the Federal Reserve. “My belief is we got to get inflation under control. I think inflation is tied to what Milton Friedman said that if you dramatically increase your money supply faster than you increase your output, then you’re going to have inflation.”
He criticized Congress for failing to balance the budget and Federal Reserve Chairman Jerome Powell for dramatically expanding the Fed’s balance sheet during the COVID-19 pandemic. “The Federal Reserve never before lost money,” he said. “It’s losing $100 billion a year right now. It’s only because of [Jerome] Powell.”
Congress has repeatedly passed large spending bills without corresponding revenue increases, contributing to rising annual deficits. Although the federal revenue rebounded after the pandemic, spending on stimulus programs, defense, and entitlement programs continued to outpace it.
During the pandemic, the Federal Reserve expanded its balance sheet by purchasing trillions of dollars in Treasury bonds and mortgage-backed securities. This was intended to stabilize financial markets, keep interest rates low, and support the broader economy during the crisis. However, it also dramatically increased the supply of money in circulation.
Trump has previously suggested he believes he has the authority to fire Federal Reserve Chairman Jerome Powell—a move that would mark a major break from historical norms protecting the Federal Reserve’s independence. However, Scott emphasized that, while he believes leaders must follow the law, elected executives should also have the ability to choose who implements their policies.
“If you work for the executive branch, then the President should have the right to pick who works at the executive branch,” he said.
For Scott and many like-minded policymakers, tariffs are not simply about protecting American industries. They represent a broader strategy to reclaim control over the nation’s economic interests in an increasingly volatile world. Looking ahead, Scott emphasized a straightforward goal: expanding opportunities for American workers in a fairer global market.
“I want the American worker to sell more stuff. So lower your tariffs, lower your barriers, get rid of all of it,” Scott said.
Nashla Turcios ’28 (nashlaturcios@college.harvard.edu) writes News for the Harvard Independent.