Republican presidential nominee Donald Trump defended his tariff plans, asserting benefits for American manufacturing despite economists’ concerns over consumer costs. In a Bloomberg interview hosted by the Economic Club of Chicago, Trump dismissed fears that tariffs would worsen inflation and harm relations with allies, including Europe. He claimed, “The higher the tariff, the more likely it is that the company will come into the United States, and build a factory in the United States so it doesn’t have to pay the tariff.”
Bloomberg’s John Micklethwait challenged Trump on potential consumer price hikes during the transition of building U.S. factories. Trump suggested imposing tariffs “so high, so horrible, so obnoxious that they’ll come right away,” considering tariffs as high as 100% or 200% on foreign products.
Harris-Walz 2024 spokesperson Joseph Costello criticized Trump’s stance, stating, “Trump showed exactly why Americans can’t afford a second Trump presidency.” Costello described Trump’s positions as extreme and unfocused, presenting a risk that Americans should avoid.
Smoot-Hawley memories
Micklethwait highlighted that 40 million U.S. jobs and 27% of GDP depend on trade, questioning how tariffs could aid the economy. He drew parallels to the Smoot-Hawley tariff law of 1930, linked to the Great Depression. Trump did not explain how his tariff proposals would avoid similar trade conflicts.
The U.S. Senate’s official explainer labels Smoot-Hawley as a catastrophic act. A CRS report notes it was the last time Congress set tariff rates. Desmond Lachman from the American Enterprise Institute warned that Trump’s proposed tariffs, particularly against China, could provoke retaliatory tariffs, mirroring destructive 1930s policies.
The presidency and the Fed
Trump expressed the desire for presidential input on Federal Reserve interest rate decisions but avoided commenting on retaining Chairman Jerome Powell. He stated, “I think I have the right to say I think he should go up or down a little bit.”
Trump declined to comment on communications with Russian leader Vladimir Putin, suggesting such relations are beneficial. Journalist Bob Woodward reported in his book “War” that Trump and Putin spoke seven times, with Trump sending COVID-19 tests to Russia, confirmed by multiple news reports.
Trump anticipates the presidential race focusing on Pennsylvania, Michigan, and possibly Arizona. The Economic Club of Chicago has invited Democratic nominee Kamala Harris for an interview.
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