Treasury Secretary Janet Yellen is expected to call for a significant increase in U.S. tariffs in a speech to the Council on Foreign Relations on Thursday, offering a thinly veiled criticism of former President Donald Trump's plan to raise import taxes.
According to prepared remarks, Yellen will decry high universal tariffs as inflationary and harmful to American businesses. She would argue that while tariff proposals may have political appeal in election campaigns, they could have a profoundly disruptive impact on the global economy.
“Claims of cutting off the United States by imposing similarly high tariffs on friends and competitors, or by treating even our closest allies as trading partners, are deeply misguided.Significant, untargeted tariffs are , will raise prices for American households and make our businesses less competitive,” Yellen's statement said.
Yellen will especially warn about “.[going] That's it,” he said, warning of the risks posed by alienating U.S. allies with high tariffs.
Her remarks came after a controversial interview between President Trump and Bloomberg News Editor-in-Chief John Micklethwait, in which the president doubled down on his promise to increase tariffs. President Trump has proposed various general tariffs at the 10% and 20% levels.
“It's going to have a big effect, a positive effect. It's going to be a positive effect,” President Trump asserted earlier this week. “It must be tough to spend 25 years talking about the negative tariffs and then have someone explain to you that that's completely wrong.”
Economists have championed free trade throughout the postwar period through a variety of forums, treaties, and initiatives, including the General Agreement on Tariffs and Trade, the North American Free Trade Agreement, and the World Trade Organization.
Academic economists have long supported this principle through the idea of “comparative advantage.'' In other words, different countries and regions of the world should be encouraged to do their best and be rewarded for their products in open global markets.
However, the subsequent decline in U.S. manufacturing employment and security concerns from global competition have created cracks in traditional thinking about trade.
“The challenges we face today, from supply chain disruptions to climate change and global pandemic preparedness to China's industrial overcapacity, are simply a matter of continuing old strategies,” Yellen said Thursday. It also means that it is not possible to do so.”
The supply chain includes almost normalized Amid the strong economic recovery from the pandemic, inflation has fallen again towards a 2% annual rise. Entrepreneurs and business experts told The Hill that transportation and logistics channels between producing regions in East Asia and the United States are almost back to normal.
But big bills passed under the Biden administration, such as the Key Climate Change Technology and Semiconductor Manufacturing Act, promise some revitalization of America's industrial base. Investment in manufacturing construction is rapidly increasing employment in the department It is still not widespread compared to historical levels.
Experts warn that a U.S. manufacturing renaissance is unlikely to materialize.
“Deep-rooted factors common to all countries, such as technological change, changing consumer spending patterns, and trade, are contributing to the lag in manufacturing employment, and these trends are unlikely to reverse.” Written by Robert Z. Lawrencenon-resident senior fellow at the Peterson Institute for International Economics.
“The industrial sector's historical role as a driver of opportunity and inclusive growth is unsustainable,” Lawrence's book argues, warning against the “nostalgia” underlying the recent return to industrial policy. are.
