Today is
Monday April 07, 2025
(WASHINGTON) -- White House National Economic Council Director Kevin Hassett defended President Donald Trump's tariffs on Sunday, refuting the idea they will cost American consumers more.
“So, the fact is, the countries are angry and retaliating and, by the way, coming to the table. I got a report from the [U.S. Trade Representative] last night that more than 50 countries have reached out to the president to begin a negotiation. But they're doing that because they understand that they bear a lot of the tariff. And so, I don't think that you're going to see a big effect on the consumer in the U.S. because I do think that the reason why we have a persistent, long-run trade deficit these people have very inelastic supply. They've been dumping goods into the country in order to create jobs, say, in China,” Hassett told ABC News' "This Week" anchor George Stephanopoulos.
Trump announced tariffs on nearly all of the U.S.'s trading partners on Wednesday. Trump's policy includes a 10% tariff on all imports, as well larger tariffs on some individual countries. The announcement was met with an immediate and ongoing plunge in global markets as well as various countries levying retaliatory tariffs against the U.S. Democratic lawmakers and critics of Trump's economic policy raised alarms about a potential recession and adverse effects on the U.S.'s relationship with allies.
The universal 10% tariffs went into effect on Saturday, while tariffs on individual countries are set to go into effect on Wednesday.
Former Treasury Secretary Larry Summers disagreed with Hassett’s contention that tariffs will cause a drop in prices for American consumers.
“This is the biggest self-inflicted wound we've put on our economy in history. We are increasing inflation because the prices are higher because of the tariffs. That gives people less spending power. That means fewer jobs," Summers said after Hassett's interview. "Markets are looking at all of that. And they think companies are going to be worth $5 trillion less than they thought before these tariffs started. And that's just the loss to companies. If you add in the loss to consumers, a reasonable estimate would probably be something like $30 trillion.”
Here are other highlights from Hassett and Summers’ interviews:
Hassett on Trump using the market crash to influence the Fed
Stephanopoulos: Right, but you also -- he also said prices were going to come down and he just conceded the prices are going to go up. Also on Truth Social, the president retweeted a post that said the market drop was part of a deliberate strategy to force the Fed to lower interest rates. Is that the president's strategy? If not, why did he post it?
Hassett: Yeah, that, you know, the bottom line is the president has been talking about tariffs for 40 years and this is like been absolutely the policy that he's focused on in the campaign and throughout his political career. And you know, the cyclical cycle of the Fed, it comes and goes. That's a different matter. But this is President Trump's desired policy. He's been arguing for it ever since. I think he was on “The View” 30, 40 years ago, and it's exactly -- the baseline tariff is exactly what he -- he put into the convention.
Stephanopoulos: But is it his strategy --
Hassett: So, this is not a surprise for anyone.
Stephanopoulos: Is it his strategy to force the Fed to lower interest rates, and that the market crash was part of that strategy?
Hassett: We understand the Fed is an independent agency. We respect the independence of the Fed. But the president's allowed to have an opinion. The -- absolutely, the president's allowed to have an opinion but there's not going to be any political coercion over the Fed, for sure.
Stephanopoulos: So -- so that is his strategy? Tank the market so the Fed will lower interest rates?
Hassett: No, no, no.
Hassett on the lack of tariffs against Russia
Stephanopoulos: Why did the president not include Russia on the list of countries who are facing tariffs?
Hassett: There's obviously an ongoing negotiation with Russia and Ukraine, and I think the president made the decision not to conflate the two issues. It doesn't mean that Russia, the fullest of time, is going to be treated wildly different than every other country, but Russia is one of the only countries, one of the few countries, that is not subject to these new tariffs, aren't they? They're in the middle of a negotiation, George, aren't they?
Stephanopoulos: Well, I'm asking a different question: Why? And I just want to know why---
Hassett: Would you literally advise that you go in and put a whole bunch of new things on the table in the middle of a negotiation that affects so many American and Ukrainian and Russian lives.
Stephanopoulos: Negotiators do that. Negotiators do that all the time.
Hassett: No, no, that's not appropriate to throw a new thing into these negotiations right in the middle of it. It's just not.
Stephanopoulos: So you are conceding that Russia is not paying any new tariffs, unlike many of our allies, including Europe, Canada, Mexico.
Hassett: Russia is in the midst of negotiations over peace that affects, really, thousands and thousands of lives of people, and that's what President Trump is focused on right now.
Summers on the stock market
Stephanopoulos: If you're advising American consumers, also American corporate leaders on where this is headed, how would you counsel them to prepare for all of this?
Summers: Look, I think there's a very good chance there's going to be more turbulence in markets. The two-day move we saw on Thursday and Friday was the fourth largest two-day move since the Second World War. The other three were the 1987 crash, the 2008 financial crisis, and the pandemic. So a drop of this magnitude signals that there's likely to be trouble ahead. And people ought to just be very cautious.
But the risk is, of course, when all of us decide to be cautious, that can become a bit of a self-fulfilling prophecy. Unless and until the president recognizes that this is a very serious error that is likely to have very adverse consequences, I think it's likely to make things very difficult. I think people are right to hold off on making big new purchases, businesses are right to be cautious. People are right to want to hold cash. What we need is a reversal of these policies, and until we have a reversal, I think we're going to have a real problem. This is a moment of testing for the president's advisers. The intellectually honest ones know that this reflects presidential 40-year fixation, not any kind of proven economic theory.
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