President Donald Trump’s former top economic advisor, Gary Cohn, said Thursday that the trade war the U.S. has been embroiled in with China could not be won and is damaging the country’s economy.
Cohn said in an interview with BBC that the tariffs imposed by Trump were affecting the cost of importing necessary product from China, hurting the administration’s plans to stimulate growth through tax cuts.
“When you build plant equipment, you’re buying steel, you’re buying aluminum, you’re buying imported products and then we put tariffs on those, so literally the tax incentive we gave you with one hand was taken away with the other hand,” said Cohn, who resigned as director as the U.S. National Economic Council after the President announced levies on aluminum and steel earlier this year.
He then continued by stressing that “everyone loses in a trade war.” Cohn noted that Trump had always believed he could straighten out trade imbalances with China by slapping tariffs, but the slowdown in the Chinese economy was inevitable even without them, the former Goldman Sachs president said.
“I think the Chinese economy was going to slow down with or without a trade war,” he said, adding that it was having “a real impact” in parts of the U.S. economy such as automobile manufacturing and farming, CNBC reports.
Cohn also commented on President Trump’s remarks that Federal Reserve Chairman Jerome Powell “let us down” by not announcing higher rate cuts than the quarter-point reduction announced Wednesday. The former economic advisor pointed out that the central bank was an independent body and the President was not to make any attempts to influence monetary policy.
“It’s not supposed to be a political agency. And I very much believe in those separations of powers,” said Cohn, adding that Powell was doing a “very good job.”