Treasury Secretary Janet Yellen will warn in a speech Thursday that the type of tariffs planned by former President Donald Trump, if he were to take over the White House, would reignite inflation and hurt the economy.
Yellen’s remarks, which she will deliver today at 3 p.m. ET at the Council on Foreign Relations in New York, will take aim at the potential economic impact of Trump’s proposals for across-the-board 10% levies on all products. imported into the United States from abroad, as well as tariffs of 60% or more on imports from China.
Although Yellen did not specifically name Trump, she described the dangers of “massive, untargeted tariffs” in excerpts of the speech released Thursday morning by the Treasury Department. Economists largely agree that Trump’s sweeping tariffs prove to be inflationarygiven that they would be paid for by American consumers – not foreign governments, as Trump claimed – by raising prices on everything from food to cars.
“Calls to isolate America by imposing high tariffs on our friends and competitors, or treating even our closest allies as transactional partners, are deeply misguided,” Yellen will say in her speech, according to excerpts provided to CBS MoneyWatch. “Massive, untargeted tariffs would raise prices for American families and make our businesses less competitive.”
Meanwhile, Trump has been promoting his tariff plan while campaigning for the Nov. 5 presidential election. On October 15, Trump told Bloomberg editor-in-chief John Micklethwait at an Economic Club of Chicago event that tariffs were “the most beautiful word in the dictionary.”
“The tariffs are two, two things, if you look at it? The first is the protection of the businesses that we have here and the new businesses that are going to set up because we are going to have thousands of businesses that are coming to this country . ” Trump said at the event. “We’re going to grow it like never before.”
But economists note that Trump’s plan could increase the costs of a estimated at $1,700 per year to the typical middle-class household. And some U.S. companies that manufacture domestically, like automakers, import parts from abroad, meaning they would also experience increased costs and would likely have to raise prices.
In her speech, Yellen will highlight how the Biden-Harris administration has stabilized the economy after the chaos created by the pandemic, as well as strengthened relations with other countries, which she describes as vital to U.S. economic growth.
“We have focused on stabilizing and strengthening relationships and working multilaterally, in part because we believe that America’s economic well-being depends on a growing and secure global economy,” Yellen will say. “We must promote policies, investments and institutions that support global growth, protect financial stability and avoid economic instability.”
