Kevin Lamarque/Reuters
- Trump’s former economic policy chief Gary Cohn said in a Politico interview published Tuesday that the president’s policies undercut his case for re-election to swing voters.
- He pointed out the negative effect that tariffs from the trade war with China had on American businesses, as many had to pull back on spending and hiring more workers.
- Trump’s trade war with China forced many businesses, particularly in manufacturing, to cut back on spending and investing, and led some to close their doors.
- Visit Business Insider’s homepage for more stories.
President Trump’s former top economic adviser said the economy would be better shape if it were not for the administration’s own policies, such as embarking on a trade war with China.
Gary Cohn, the White House’s first National Economic Council director, told Politico in an interview published Tuesday that the president’s case for re-election to voters in critical swing states has been undercut by some of his own decisions.
He said that Trump’s decision to slap tariffs on Chinese goods diminished any stimulus stemming from the 2017 GOP tax cuts for American businesses.
“He stood there in Pennsylvania and talked about bringing steel mills back and what’s happened is we’ve cut steel lines,” Cohn said. “We gave companies a big tax cut then took it away with tariffs. These are the pieces that are missing. I think he could have had it all. And he doesn’t have it all.”
Yet Cohn did say Trump has several economic metrics on his side, such as a booming market and steadily increasing wages for workers.
“The stock market he’s got. Wages he’s got. The consumer side of the economy is working really well,” he told Politico. “The soft underbelly is [that] capital expenditure is not there,” he said, referring to a pullback in business investment.
The comments come a few days after Cohn went on CBS’s Face the Nation and blasted the tariffs as damaging to the economy, saying, “I think it’s totally hurt the United States.”
Cohn, a key figure in crafting the Republican tax law, resigned from the National Economic Council in March 2018 after Trump imposed tariffs on all aluminum and steel shipments entering the United States. A staunch advocate of free trade, Cohn reportedly lobbied against the tariffs.
Trump’s trade war with China forced many businesses, particularly in manufacturing, to cut back on spending to expand operations and hire more workers.
That sector is now in the midst of a recession, according to the Federal Reserve. Consumers have also borne the brunt of the tariffs instead of the Chinese government, despite Trump’s claims, economists say.
The president last week signed an interim trade deal meant to stem the pain on both sides, as the US will cut tariff rates on $110 billion of Chinese goods while leaving others on tranches worth $250 billion untouched.
The tariffs, though, are expected to remain in place until a broader accord is reached that defuses longstanding tensions over intellectual property rights and currency practices.
