What You Must Know
- Trump has floated tariff hikes as a technique to pay for some earnings tax cuts.
- His anti-immigration stance might squeeze the labor provide, and repealing Biden’s renewable power subsidies would push up energy prices, the previous Treasury secretary says.
- A Trump spokeswoman mentioned his insurance policies would cut back inflation.
Former Treasury Secretary Lawrence Summers blasted coverage concepts floated by former President Donald Trump as immensely damaging to each the U.S. and the worldwide economic system.
“It is a prescription for the mom of all stagflations,” Summers mentioned on Bloomberg Tv’s Wall Avenue Week with David Westin Friday, with regard to changing a significant quantity of income-tax income with tariffs. It could additionally create “worldwide financial warfare,” he mentioned.
Summers was talking a day after Trump introduced the concept of utilizing tariff hikes as a technique to pay for some earnings tax cuts in a gathering with Home Republicans. Trump has additionally proposed a minimal 10% common import levy and a punitive charge for China.
A shift to counting on tariffs for income would push up not simply the price of imports, however these of products and providers that compete with these imports, Summers mentioned. Shoppers would have much less to spend on every thing else, making a “downward spiral” within the economic system, he mentioned.
“I don’t assume there’s been a extra inflationary presidential financial coverage platform in my lifetime,” mentioned Summers, a Harvard College professor and paid contributor to Bloomberg TV. “Maybe George McGovern in 1972 in some methods can be a comparability,” he mentioned, referring to the Democratic nominee who misplaced in that contest.
Marketing campaign Response
Requested about Summers’s criticisms, Karoline Leavitt, a Trump marketing campaign spokesperson, mentioned, “President Trump’s first-term pro-growth financial insurance policies created record-low mortgage, curiosity and unemployment charges and made inflation nearly non-existent.”
“People can count on President Trump’s second-term financial agenda could have the identical affect and finish Joe Biden’s inflation disaster that continues to rob working households of 1000’s of {dollars} each month,” Leavitt mentioned.
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