Art Laffer, a noted conservative economist, said in a new interview that President Trump’s tariffs could cause a significant downturn in the economy.
“I don’t know how anyone looking at the facts could argue that protectionism doesn’t create downturns,” Laffer said in an interview with Axios on Wednesday.
“The more protectionism there is, the greater the downturn. Reducing tariffs and protectionism causes a boom in the economy,” Laffer added.
Laffer — whom Trump awarded the Presidential Medal of Freedom for his contributions to economics in 2019 — said he was optimistic that Trump would secure trade deals and eventually reduce tariffs.
He called the president a “great negotiator” and said he was the “single best president” of his lifetime, according to Axios.
But Laffer said he is concerned about the potential economic damage that could occur in the meantime.
“You will find out whether I’m right to be scared or right to be hopeful probably in 90 days — there’s not a lot of time,” Laffer said in the Axios interview.
“Once you screw around with supply chains, production facilities, all of that, it’s very hard to reverse that,” he added. “What you got here is something that is very time sensitive.”
Trump announced a series of new tariffs since taking office, including a 10 percent baseline tariff, with higher “reciprocal” tariffs on many U.S. trading partners. Two weeks ago, he announced a 90-day pause on the higher tariffs for most countries, to allow time for countries to negotiate trade deals with the U.S.
Trump left China’s tariffs in place and subsequently increased them to 145 percent, sparking concerns about a trade war between the two largest economies in the world. In recent days, Trump has shifted his tone on China, saying the 145 percent duty is “very high” and suggesting he’s optimistic about a deal with China.
