Praising his maths skills, Trump rebuts criticism that his tax cuts and tariff plans will swell US deficits and debt, lower growth and lead to higher inflation.
It seems like every time Donald Trump makes a public appearance, he promises yet another tax cut. Now he’s doing something similar with his cherished tariffs.
Arguing that tariffs would not only raise hundreds of billions of dollars in deficit-reducing revenue from the exporting countries, but also provide an incentive to foreign companies to shift their plants to the US, he claimed that the higher the tariff, the more likely it was that companies would build their factories in the US to avoid it.
He also threatened tariff rates of “100, 200, 2000 per cent” on cars from Mexico, which has a free trade agreement with the US and therefore could provide a back door to the US market.Trump rejects the consensus view of economists - and the actual experience of his 2018 tariffs on imports from China - that it will be US companies and consumers that pay the price, making them a form of consumption tax.
During his last term as president, Trump claimed his tax cuts and deregulation would generate economic growth of as much as 6 per cent a year. It peaked at only half that level and his policies, even if the impact of spending in response to the pandemic is excluded, resulted in a massive increase in government debt.
And the damage wouldn’t be confined to the US. Indeed, even though the policies would do material long-term harm to the US economy and households, it is likely his trade policies would be even worse for US trade partners’ economies and consumers, particularly China and the EU. “I don’t think I should be allowed to order it, but I think I have the right to put in comments as to whether or not interest rates should go up or down.”
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