Anamika Dey, editor
Brief news
- Trump’s economic policies, including universal tariffs, are expected to raise consumer prices temporarily, as acknowledged by supporters like Elon Musk and Howard Lutnick.
- Critics, including Kamala Harris, label these tariffs as a “Trump sales tax,” warning of potential inflation and increased government deficit.
- Despite acknowledging short-term pain, Trump’s allies argue that long-term benefits, such as higher wages, will outweigh initial consumer costs.
Detailed news
A number of Trump’s most trusted supporters and surrogates, like Elon Musk, CEO of Tesla, are in agreement with experts who assert that Trump’s economic policy ideas would result in an increase in costs for consumers. However, Trump’s allies argue that this effect would only be temporary and would be beneficial in the long run.
Musk expressed his agreement with a social media post on X that was published on Tuesday. The author of the article stated that the policy plans proposed by the Republican presidential nominee might cause a “severe overreaction in the economy,” which would result in “markets will tumble” before returning to a “sounder footing.” Musk agreed with this statement.
Elon Musk, one of the most prominent billionaires who have supported Donald Trump, replied by saying, “That sounds about right.”
Independent economists, experts on Wall Street, and researchers have issued a warning that the measures that Trump has proposed for his second term pose a risk of increasing the government deficit and reviving inflation.
She has seized on this criticism by referring to Trump’s tariff proposal and the possible price rises that might follow as the “Trump sales tax.” Kamala Harris, the Democratic contender for vice president, has made this claim.
Musk is not the sole Trump surrogate who has acknowledged that the former president’s economic platform, which includes universal tariffs on imports, would immediately increase consumer prices on imports if implemented. These tariffs are particularly high on Chinese products.
Howard Lutnick, CEO of Cantor Fitzgerald and a co-chair of the Trump-Vance 2025 transition committee, also acknowledged last week that the tariffs Trump has pledged to impose on foreign products would result in an increase in prices.
Lutnick responded to a query about whether universal tariffs would effectively become a short-term sales tax by stating, “Correct: If I raise the tariff on just this particular idiosyncratic product, yes, right, it will be more expensive.” This statement was made during a Thursday interview on CNBC’s “Squawk Box.”
Lutnick stated that consumers would be more inclined to purchase domestic alternatives due to the increased prices of imports. However, he also acknowledged that this approach would be unsuccessful for products that the United States does not manufacture.
“The price will increase if we do not produce that specific product,” he stated.
Sen. JD Vance of Ohio, Trump’s running companion, has also acknowledged the potential consumer suffering associated with Trump’s vision for across-the-board tariffs. However, he asserted that the potential benefits would be worth it.
During an interview that took place in August on NBC’s “Meet the Press,” Vance gave the following statement: “Anything that you lose on the tariff from the perspective of the consumer, you gain in higher wages, so you’re ultimately much better off.”
However, recent statements made by individuals such as Musk and Lutnick also allude to a new strategy that Trump’s friends are employing in order to deflect such assaults. This strategy allows them to accept some immediate pain in exchange for ultimate advantages.
The Trump campaign denied that its policy proposals would result in temporary economic hardships in response to CNBC’s inquiry regarding the recent statements of Trump surrogates. Instead, they asserted that his Democratic opponent would be accountable for any economic risks.
A senior aide to the Trump campaign named Brian Hughes told CNBC in a statement that “the only pain facing Americans would be four more years of Kamala’s failed economic policies.”
In a separate statement, Anna Kelly, a spokesperson for the Republican National Committee, reiterated Hughes’s sentiments by saying, “Harris can’t keep her story straight, but the truth is the same: Harris has always opposed tariffs because she can’t be trusted to put workers first.”
Source : CNBC News
