Janet Yellen will go after Donald Trump by warning that raising tariffs is 'deeply misguided'
Treasury Secretary Janet Yellen is expected to warn that installing steep tariffs, like those proposed by former President Donald Trump, would be “deeply misguided” for consumers and corporations.
Although Yellen isn’t expected to refer to the Republican presidential candidate by name when she speaks at the Council on Foreign Relations on Thursday afternoon, she does reference his repeated calls for massive tariffs on foreign goods, according to excerpts released by the Treasury Department.
“Calls for walling America off with high tariffs on friends and competitors alike or by treating even our closest allies as transactional partners are deeply misguided,” Yellen said in the excerpts. “Sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive.”
Yellen is also expected to push back against a “go it alone” philosophy when it comes to advancing economic and security interests. Dealing with everything from climate change to broken supply chains “means we cannot simply draw from an old playbook,” she will say.
On Tuesday, while speaking to the Economic Club of Chicago, Trump called tariffs “the most beautiful word in the world” and said his proposed duties would “bring companies back to our country.” While speaking about his proposed tariffs, he suggested putting duties as high as 2,000% on foreign vehicles. Yellen is also expected to defend President Joe Biden’s own tariffs on Chinese-made vehicles.
Between 2018 and 2020, the Trump administration raised taxes on U.S. imports from China by more than 500%. Those goods represented more than a fifth of everything that Americans purchased abroad, Quartz reported in 2020. Prior to Trump’s trade war, the U.S.’s tariffs were among the lowest in the world, averaging at around 1.6%.
On the 2024 campaign trail, Trump has proposed raising imports on China by as much as 50%, to 60% in total, while adding duties of 10% to 20% against products from the rest of the world. He’s also talked about a “100% tariff” on countries that “leave” the U.S. dollar.
His tariffs could, by some estimates, add between $1,700 to $7,600 in annual costs to American households. According to the Institute on Taxation and Economic Policy (ITEP), his potential tariffs hikes would outweigh the effects of any tax cuts he’d institute for 95% of American households.
“They would cause substantial price increases on imported goods, severely damage the industries that rely on imports, hurting employment in those industries, and result in price increases for goods for which final production occurs domestically,” the ITEP said of the tariffs, which it noted “would massively disrupt the economy.”