Add Alan Greenspan to the growing list of vocal detractors regarding President Donald Trump’s seemingly endless tariffs on China, with the former Federal Reserve Chair calling the policy “insane” and “why we’re doing it probably is very deep in the psyche of somebody.”
The “somebody” he’s referring to obviously is Trump.
Greenspan gave a recent talk at an event at New York University on Wednesday when someone asked a question about China. He responded by saying both sides ultimately end up losing in a trade war.
“There are victors and there are losers in a tariff fight,” he said. “But that doesn’t say that a more important issue is both are losing, it’s just the winner loses less.
“It’s an excise tax, and people think of tariffs other than what it is. It’s a tax and everybody engaged in warfare of this type, it would mean that you’re withdrawing credit or purchasing power from a whole series of countries.”
Greenspan also noted that China won’t be able to outrace the U.S. in all economic respects, saying it “is a mistake,” singling out China’s lower gross domestic product per capita as the main reason.
The Trump administration and China have had an ongoing tit-for-tat tariffs battle raging since January when the U.S. lobbed the first of many tariff salvos on solar panels and washing machines.
Senate Majority Leader Mitch McConnell also recently called on Trump to end the trade war with China before it tanks the U.S. economy.
China said early Thursday that trade talks with the U.S. have resumed, and the two presidents, Trump and China’s Xi Jinping, are scheduled to meet later this month at a gathering of the Group of 20 major economies in Argentina.
If Trump is able to negotiate a trade deal, it will likely send the stock market soaring.
Editor’s note: Since Trump is known for being a deal maker, how confident are you that a deal with China will be reached?