Republican presidential candidate Donald Trump defended his plans to impose high tariffs on Tuesday, arguing that economists who say higher costs will be passed on to consumers are false and that his proposals would benefit U.S. industry.
During a contentious, hour-long interview with Bloomberg editor-in-chief John Micklethwait organized by the Economic Club of Chicago, Trump flatly denied that tariffs on some imported goods would lead to further spikes in inflation and worsen America’s relations with allies, including Europe.
“The higher the tariff, the more likely it is that a company will come to the United States and build a factory in the United States so they don’t have to pay the tariff,” Trump said.
Micklethwait questioned Trump about what will happen to consumer prices in the months or even years it will take for companies to build factories in the United States and hire workers.
Trump responded that he could impose tariffs “so high, so terrible, so disgusting, that they would be implemented immediately.” Earlier in the interview, Trump mentioned imposing tariffs on foreign products of up to 100% or 200%.
Harris-Walz 2024 spokesman Joseph Costello wrote in a statement after the interview that “Trump has demonstrated exactly why Americans cannot afford a second Trump presidency.”
“An angry, babbling Donald Trump had trouble concentrating, had to be reminded repeatedly about a topic, and whenever he expressed a position, it was so extreme that no American would want it,” Costello wrote. “It was another reminder that a second Trump term is a risk Americans simply cannot take.”
Smoot-Hawley’s memoirs
Micklethwait noted in the interview that 40 million jobs and 27% of gross domestic product in the United States rely on trade, questioning how tariffs on these products would facilitate the economy.
He also asked Trump whether his tariff plans could take the country down a similar path to the one he was on Smoot-Hawley Tariff Act went into effect in June 1930. Signed by President Herbert Hoover, some historians and economists have linked the law to the beginning of the Great Depression.
Trump disagreed with Micklethwait, although he did not explain in detail why his proposals to raise tariffs on goods from hostile countries and U.S. allies would not start a trade war.
US Senate official translator on the Smoot-Hawley tariff describes the law as “one of the most disastrous acts in the history of Congress.” And notes Congressional Research Services in: a report on U.S. tariff policy that this was the last time lawmakers would set tariff rates.
Desmond Lachman, a senior fellow at the American Enterprise Institute, a conservative think tank, wrote last month that Trump’s proposal to impose tariffs of at least 60% on goods imported from China and 10-20% on all other imports could have earnest economic consequences.
“It is difficult to understand how such a unilateral trade policy in flagrant violation of World Trade Organization rules would not lead to retaliation from our trading partners in the form of their own import tariff increases,” Lachman wrote. “As in the 1930s, this could lead us down a destructive path to beggar-neighbor trade policies that could cause major disruptions to the international trading system. Such an event would be particularly damaging to our export industry and increase the risk of economic recession both in the U.S. and globally.”
CRS notes in its reports that while the Constitution gives Congress the power to set tariffs, lawmakers have also granted the president some authority to set tariffs.
According to CRS, U.S. membership in the World Trade Organization and various other trade agreements also comes with “tariff-related obligations.”
“For more than 80 years, Congress has delegated broad tariff-setting authority to the President,” the CRS report states. “This delegation insulated Congress from domestic pressures and led to an overall decline in global tariff rates. But this meant that the United States’ desire to create a low-tariff, rules-based global trading system was the result of executive discretion. While Congress has set negotiating goals, it has relied on the president’s leadership to achieve those goals.”
President and Fed
Trump said in the interview that he believes the president should have more influence on whether the Federal Reserve raises or lowers interest rates, although he did not answer a question about keeping Jerome Powell as chairman for the rest of his term.
“I think I have the right to say it should go up or down a little bit,” Trump said. “I don’t think I should be able to order this. But I think I have the right to comment on whether interest rates should increase or decrease.”
Trump declined to say whether he had spoken to Russian leader Vladimir Putin since leaving office.
“I’m not commenting on that,” Trump said. “But let me tell you, if I did, it would be a astute move. If I am affable towards people, if I have a good relationship with them, then it is good, not bad.
Journalist Bob Woodward wrote in his fresh book “War” that Trump and Putin I talked at least seven times and that Trump secretly sent Putin tests for the Covid-19 virus during the pandemic, which was later confirmed by the Kremlin, reports several news reports.
Trump said the presidential race will likely come down to Pennsylvania, Michigan and possibly Arizona.
The Economic Club of Chicago also invited Democratic presidential candidate Kamala Harris for a sit-down interview.
