Trump Tariff Hurting US More Than They Are Hurting China

Trump’s former chief economic adviser, Gary Cohn, said the battle has had a “dramatic effect” on US manufacturing and capital investment.

Mr. Cohn resigned from the Trump administration in March 2018, and was the former president of Goldman Sachs bank. He was a very unusual hire for Trump since he was a democrat in a Republican administration.

Trump and Cohn had different mentalities; Cohn focused on economic internationalism whilst Trump focused on economic nationalism. Cohn resigned from the National Economic Council after Trump decided to impose import tariffs on steel and aluminum.

Cohn stated that the “Chinese economy is driven by credit and credit availability. Credit and credit availability are determined by the central government. And they can turn it on and they can turn credit off.”

Cohn warned that everyone loses in a trade war, and tariffs will not benefit the United States economy, even though Trump believes it will.

Cohn stated that US’s economy is 80% service-based, and the 80% is doing well because it is not being tariffed. The tariffs have made it expensive for the US to import vital products from China, which offsets effects of Trump’s tax cuts where designed to help the US economy.

There is a low percentage of manufacturing job creation in the US as the equipment needed to build factories in the United States are expensive now due to the tariffs.

The trade wars have also created geopolitical uncertainty, according to Mr. Cohn. Investors and businesses do not want to invest in the United States now that there are trade wars between China and the United States. Henceforth, it is obvious that the trade wars are hurting the United States.