Trump’s top economic adviser rejects recession threat
WASHINGTON – Never mind the market swings and ongoing trade wars. The U.S. economy will remain strong through 2020 and beyond, President Donald Trump’s advisers on the economy and trade said Sunday.
“There is no recession in sight,” top White House economic adviser Larry Kudlow said on “Fox News Sunday.”
White House director of trade policy Peter Navarro likewise said on the Sunday news circuit that trade negotiations with China are going well and steps being taken by the Federal Reserve and the European Central Bank will keep the global economy humming.
The Dow Jones Industrial Average suffered its worst plunge of the year Wednesday, caused in part by fears of a worldwide recession and global trade wars.
The market returned to positive territory midday Thursday. But jitters remain.
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There’s still the ongoing trade war with China, for example. The Trump administration announced last week it would delay until Dec. 15 tariffs on Chinese goods that were supposed to go into effect in September.
Kudlow said negotiations continue. If ground rules and other issues can be worked out in the next week or two, Chinese officials could come to Washington for face-to-face discussions.
“We are doing very well with China, and talking!” Trump tweeted Sunday afternoon.
But China last week sidestepped the idea of another meeting between Trump and Chinese counterpart Xi Jinping and threatened retaliation if the United States follows through with new tariffs on its exports.
Economists said U.S. consumers wind up paying for the tariffs, slowing economic growth and hamstringing markets.
The White House, however, has blamed the Federal Reserve’s interest rate policies for the market slump.
Navarro said both the Federal Reserve and the European Central Bank are expected to lower rates. China could also take steps to stimulate its economy, he said.
Navarro also held out hope that Congress will approve a pending renegotiated trade deal with Canada and Mexico.
“Things are shaping up well for stimulus worldwide,” he said on ABC’s “This Week with George Stephanopoulos.”
Democratic presidential contenders, however, don’t see it that way.
New York Sen. Kristen Gillibrand told ABC News that she’s concerned about a recession because the renegotiated NAFTA deal is “a disaster.”
Pete Buttigieg, the mayor of South Bend, Indiana, called it a “fool’s errand to think you’re going to be able to get China to change the fundamentals of their economic model by poking them in the eye with some tariffs.”
“There is clearly no strategy for dealing with the trade war in a way that will actually lead to results for American farmers or American consumers,” he said on CNN’s “State of the Union.”
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Kudlow said the administration is looking at additional tax cuts, mentioning and “interesting idea” from Sen. Rick Scott, R-Fla., to give tax cuts to consumers that offset higher prices from tariffs. The administration has already created a bailout program for farmers.
“We’ve got room to do that as well,” Kudlow said of additional help. “I can’t say definitively this morning. All I’m saying is, there’s a lot of good ideas to create more incentives to work, save and invest.”