‘Tariff hysteria’ is misrepresenting U.S. economy, says economic expert

‘Tariff hysteria’ is misrepresenting U.S. economy, says economic expert

NOW TO BREAK IT DOWN WE BRING IN FORMER COUNCIL OF ECONOMIC ADVISERS, TOMAS PHILIPSON, THANK YOU FOR JOINING US. YOU WERE THE HEAD OF ECONOMIC POLICY FOR A TIME DURING FIRST TRUMP TERM, NOW IN SECOND TERM, A LOT OF INVESTORS HAVE NOT FREAKED OUT ABOUT TARIFFS THEY THOUGHT 10% RANGE DISCUSSED MIGHT BE THE LEVEL, THEY THOUGHT GIVEN OTHER GOOD POLICY FROM THE TRUMP ADMINISTRATION, MAYBE NOT TOO BIG OF A BURDEN, BUT AS YOU LOOK AS A LOT OF COUNTRIES TALKED ABOUT MAYBE 25 TO 35% TARIFF, WHAT DO YOU THINK AS AN ECONOMIST LOOKING AT THESE TARIFF POSSIBILITY. >> THERE IS A PROBLEM WITH CENTURY, WHAT IS GOING ON, WE’RE SETTLING IN. MY HOPE THAT VIETNAM IS MODEL. AND SETTLE ON A DEAL THAT IS WHAT WE’RE LOOKING FOR, WHAT HAPPENED WITH VIETNAM WAS ESSENTIALLY A THREAT OF HIGH TARIFFS FROM OUR ADMINISTRATION, THEY GO TO ZERO ON THAT THREAT ESSENTIALLY, WE GET MORE PRETRADE FOR THE COMPANIES — FREE TRADE FOR OUR COMPANIES IN THAT COUNTRY, STUFF WITH JAPAN AND SOUTH KOREA 25%, THAT IS VIEWED AS YES, IT IS THERE BUT LET’S SEE HOW THEY RESPOND LOOK AT WHAT HAPPENED WITH CANADA, CANADA SAID THEY WOULD HAMMER DIGITAL TAXES, THEY RESPONDED AND BACKED OFF, THIS IS NOT THE END GAME, I HAVE A FILING THIS IS THE STARTING — FEELING THIS IS THE STARTING GAME. TODAY LAOS AND SOUTH AFRICA ARE NOT CENTRAL TO TAUR CENTRAL TO TOUR TRADE. DAGEN: WITH THREAT TO BRIX NATIONS WITH ATTRACT 10%. — THE EXTRA 10%, I SAW IT AS A WAY TO PEEL INDIA AWAY POTENTIALLY FROM RUSSIA AND CHINA AND BRAZIL, POTENTIALLY. BUT, BIG PICTURE, YOU HAVE WRITTEN ABOUT THIS, YOU WROTE ABOUT IT IN JANUARY THIS YEAR, PEACE THROUGH STRENGTH IN PARADE WARS. THAT — IN TRADE WARS, TRADE, REPRESENTS IMPORTS REPRESENT 13% OF OUR ECONOMY. EXPORTS 11% OF OUR ECONOMY. THAT IT IS A SMALL SLICE OF OUR GROSS DOMESTIC PRODUCT AND TARIFFS IN PLACE WE BROUGHT IN, IN CUSTOMS IN TARIFF REVENUE ABOUT 106 BILLION DOLLARS SINCE TRUMP TOOK EFFECT OF, OUR INFLATION — TOOK OFFICE OUR INFLATION IS UNDER 4% WITH PRESIDENT TRUMP SO FAR. 5% UNDER BIDEN, A LARGE PERCENTAGE OF TARIFFS ARE GETTING EATEN BY IMPORTERS OR EXPORTERS, THERE IS NOT THAT MUCH TO WORRY ABOUT, I AM FIRST PERSON WHOSE PANTS AND HAIR CATCH ON FIRE, I’M VERY KIND OF CALM ABOUT THIS. >> I THINK YOU SHOULD BE, YOU ARE RIGHT. THE TARIFF HYSTERIA THAT BOTH MAINSTREAM MEDIA AND BUSINESS PRESS, TO BE HONEST, AND A LOT OF ECONOMISTS, ARE MISREPRESENTING WHO IS A GOING, YOU LOOK AT CBO, SAY YOU HAVE 200 BILLION IN TARIFF REVENUE FOR A GIVEN YEAR THAT IS ABOUT 1% RELATIVE TO CONSUMPTION, CPI COVERS, THAT A VERY SMALL CHAIR OF — SHARE OF TOTAL CONSUMPTION, SOME WILL BE EATEN UP BY FOREIGN COMPANIES IF THEY ARE COMPETING WITH AMERICAN COMPANIES. THEY CAN’T JUST PASS ON THOSE COSTS TO THEIR CUSTOMERS. YOU KNOW IT ALSO, IF YOU HAVE 200 BILLION IN TARIFF REVENUE, THAT MEANS YOU ARE SPENDING 200 BILLION LESS ON SOMETHING ELSE. THERE IS LOWER DEMAND OTHER GOODS, THEY THEREFORE LOWER THEIR PRICES THAT OFFSETS INCREASE PRICES ON ANY TARIFF GOODS, I SAID, THIS IS NOT GOING TO BE INFLATIONARY BECAUSE OF THE MAGNITUDES INVOLVED. JAMES: TOM, ANOTHER ISSUE WE LOOK AT RECENT JOB GAINS IN THE UNITED STATES, THEY ARE CONCENTRATED AMONG NATIVE BORN WORKERS, YOU LOOK AT THAT, DOES THAT MEAN PEOPLE WHO HAVE BEEN ARRESTED FOR BEE HEARING ILLEGALLY, AND PERHAPS COMMITTING OTHER CRIMES ARE NO LONGER WORKING OR IS THERE SOMETHING MORE. >> I THINK FIRST THING I RECOGNIZE WE HAD A LOT OF SCARING GOING ON IN JANUARY, FEBRUARY, MARCH, EVERYONE TOLD US OR A LOT OF ECONOMISTS TOLD US THAT DEPORTATION WILL RAISE WAGES, AND BE INFLATIONARY, THAT DID NOT HAPPEN. FOR GOOD REASON. THE LIBERALS HAVE BEEN TELLING US FOR DECADE THAT IMMIGRATION DOES NOT DEPRESS WAGES. OKAY, BUT NOW THEY CAME OUT IN JANUARY OR FEBRUARY THEY SAID DEPORTATION WILL RAISE WAGES. THEY ARE TWO CONFLICTING ARGUMENTS, THIS IS A SMALL SHARE OF LABOR FORCE, ONE OR TWO MILLION AND MOSTLY ILLEGALS. BUT WE HAVE 170 MILLION PERSON LABOR FORCE, WHICH ONE OR TWO BILLION ILLEGALS ARE NOT A BIG — MILLION ILLEGALS ARE NOT A BIG DEAL FOR WAGES. >> TOMAS PHILIPSON GOOD TO SEE YOU. >> THANK Y

Former Trump administration head of economic policy Tomas Philipson discusses President Trump’s trade talks with South Korea and Japan, current U.S. economy post-tariffs and immigration on ‘The Bottom Line’.#foxbusiness #useconomy #economy #usa #trade #tariffs #vietnam #japan #southkorea #tradedeals #deals #trump #donaldtrump #bottomline

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