Top White House economist admits the “uncertainty” caused by Trump’s trade war hurt the economy



Igor Derysh | Salon

The top economist at the White House has admitted the “uncertainty” caused by Donald Trump’s trade war hurt the economy, contradicting the president’s repeated claims that his tariffs have had no negative impact.

Trump has falsely claimed that the government made up for any decline through revenue generated by his tariffs, even as economists found the cost was passed on entirely to U.S. consumers. Chief White House economist Tomas Philipson acknowledged Thursday that the trade war has hurt business investment, which the president wrongly predicted would spike after his 2017 tax cuts overwhelmingly benefited corporations and the rich.

“Uncertainty generated by trade negotiations dampened investment,” Philipson told reporters during a briefing on the Economic Report of the President, according to Bloomberg News.

Despite the admission, the 435-page report “barely” mentions the harmful effects of the tariffs as it argues that Trump’s policies have led to a “great expansion,” the outlet reported.

Philipson, who heads the Council of Economic Advisers, did not say how much the trade war has impacted investment. He cited a Federal Reserve study, which found it could reduce economic growth by about 1%. Though Philipson did not necessarily agree with that projection, growth did shrink by more than 0.5% last year from 2.9% GDP growth in 2018.

While Philipson acknowledged the reduction in growth, his report attempts to argue that other factors could be causing the decline. The document nonetheless contradicts the president’s claim about a blue-collar job boom.

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