Consumers got a significant pay raise: Kevin Hassett
White House Council of Economic Advisers Chairman Kevin Hassett on trade tensions with China, the state of the U.S. economy, the outlook for Federal Reserve policy and his upcoming departure from the White House.
President Trump’s threat to impose tariffs on an additional $300 billion worth of Chinese goods if President Xi Jinping fails to meet him at the G20 summit in Japan, is not just about tariffs — it’s about curbing misbehavior on the part of Chinese firms, like Huawei, and reforming bad trade deals to boost the U.S. economy, said Trump’s top economic adviser Kevin Hassett.
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“By putting tariffs on the table we’ve estimated that maybe $400 billion or $500 billion a year through forced technology transfer and intellectual property theft is taken out of the U.S. economy,” he told FOX Business during an interview on “Mornings with Maria” on Tuesday.
By imposing more taxes, the pressure shifts from the U.S. to China.
“If we put a tax on China and if we don’t buy it from China … we can buy it from Vietnam, or some other guy, if there’s a close substitute, then the harm to us is very small but the harm to them is very large,” Hassett explained.
“If you look at the list of things that we put tariffs on first, they are basically all sorted to put maximum pressure on them and minimal pressure on us and I think that’s why, say if you look at the consumer price index data, that there hasn’t been a boost in inflation that may follow for the first round of tariffs that we put on,” he added.
But fears over a slowing U.S. economy are beginning to set in as investors sit on cash because they are not sure how the trade war will turn out. Weakness in manufacturing has also been felt in the U.S. and across the globe. But Hassett maintained his forecast for 3 percent growth in 2019.
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Chinese Foreign Ministry spokesman Geng Shuang on Tuesday said China will “fight to the end” if the U.S. wants to escalate tensions.
Hassett is planning to leave his post at the end of the month.
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