The White House is finally admitting something that President Donald Trump has resolutely denied since he took office three years ago and kicked off his trade war with Europe and China: The tariffs and trade restrictions have indeed done harm to the U.S. economy.
Bloomberg reports that during a Thursday briefing, one of the administration’s top economic advisers allowed some truth to slip out:
“’Uncertainty generated by trade negotiations dampened investment,’ Trump chief economist Tomas Philipson told reporters in a briefing on the annual Economic Report of the President released on Thursday.
“The admission contrasted with Trump’s repeated assertions that his tariff tactics hadn’t hurt the economy while swelling the government’s tax coffers.”
Despite that admission, however, most of the 435-page report had nothing to say about the negative impact of the trade war:
“Even so, the deleterious effect of trade uncertainty got barely a mention in a 435-page economic report that frequently extolled the president’s programs and argued that they’ve led to a “great expansion” that is benefiting a broader swathe of Americans.
“Philipson, who is acting chairman of the Council of Economic Advisers, declined to say how much of an effect trade uncertainty has had.”
However, a recent study from the Federal Reserve suggested that the trade war may have reduced U.S. by much as 1 percent.
CEA board member Tyler Goodspeed, who wrote part of the report, tried to blame other factors for the global economic slowdown cause by Trump’s trade war:
“’Uncertainty about trade policy is one often-cited culprit in the manufacturing slowdown. However, other reasons for the global manufacturing slowdown also preceded, or were contemporaneous with trade,’ including a deleveraging-led deceleration in China’s economy.”
Philipson echoed remarks Trump made earlier this week that he — not former President Barack Obama — was responsible for the growth of the U.S. economy, telling reporters:
“Three years into the Trump administration, the U.S. economy continues to outperform pre 2016 election expectations. The economy is lowering inequality both in terms of income and wealth. That reverses the previous part of the expansion.”
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