Trump’s move to put tariff hikes ahead of tax cuts has spooked almost everyone
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Subscribe to enjoy similar stories. President Trump’s aggressive move to place tariffs on hundreds of billions of dollars in imports, ranging from crude oil and auto parts from Canada to Mexican avocados and raspberries has rattled investors, economists and some lawmakers, who are all wondering: What exactly is the goal? Larry Summers, the former U.S. Treasury secretary under President Bill Clinton, said that Trump’s move amounted to “a self-inflicted supply shock." Kentucky Republican Sen.
Rand Paul said: “Taxing trade will mean less trade and higher prices." The head of the National Association of Manufacturers, Jay Timmons, said it put American jobs at risk. “The ripple effects will be severe," he said. For many of those reasons, tariffs were the part of Trump’s economic plan investors disliked the most.
Markets have cheered Trump’s promises of tax cuts and reduced regulation, but he has vaulted his trade plan ahead of virtually everything else. Other countries have already moved to retaliate, and Trump acknowledged on Sunday that there could be some “pain" for U.S. consumers.
Canada is planning tariffs on $100 billion of goods, including alcohol, shoes, steel and aluminum and aerospace products. China, which also faces new U.S. tariffs, and Mexico prepared similar counterattacks.
Trump defended his tariffs, saying in an all-caps post: “Will there be some pain? Yes, maybe (and maybe not!)" He added that “it will all be worth the price that must be paid," and repeated a call to turn Canada into America’s 51st state. Republicans over the weekend were largely supportive of Trump’s efforts. “We are just two weeks into the Trump administration and Washington does not know what hit it," said Sen.
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