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- President Donald Trump says his recent tariffs are designed to protect US workers and industries.
- An internal report from the White House Council of Economic Advisers, however, showed that the tariffs will be a drag on US economic growth.
- Many economists and trade experts estimated that the tariffs would cause the US economy to grow at a slower pace.
Even President Donald Trump’s own economic team thinks the president’s new trade policies are likely to hurt the US economy.
According to The New York Times, an internal report prepared by the White House Council of Economic Advisers showed that the tariffs would be detrimental to US economic growth. The report, like many CEA studies, has been kept private by the administration.
But the report would also hurt the argument of many in the Trump administration that the US economy can still see robust economic growth even with the tariffs in place.
Commerce Secretary Wilbur Ross told CNBC that the tariffs would have a negligible effect on growth, claiming that GDP growth over 3% is “very, very achieveable.” In March, Treasury Secretary Steven Mnuchin said the administration was “comfortable with the economic impact” of the tariffs.
CEA Chair Kevin Hassett, whose office is responsible for the internal analysis, avoided answering numerous questions about economic effects of Trump’s tariffs during a White House press briefing on Tuesday. Hassett, a former economist at the pro-free trade American Enterprise Institute, would only say that the president is working “to get fair trade deals.”
Much of the Trump administration repeatedly argued that the tariffs will encourage other countries to lower their trade barriers on US goods, thereby boosting the economy.
“If you model a future where everybody else reduces their trade barriers to ours, then that’s massively good for the global economy and massively good for the US economy,” Hassett told reporters.
But rather than lower trade barriers, so far the countries that Trump has gone after are taking things in the opposite direction.
After the president imposed steel and aluminum tariffs on key allies, Canada, Mexico, and the European Union responded with tariffs of their own. Economists have warned that Trump’s policies could push the US economy could fall into a recession in the event the tensions escalate into an all-out trade war.