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- Gary Cohn, President Donald Trump’s former chief economic adviser, spoke at a Washington Post event on Thursday.
- Cohn said Trump wanted the US to manufacture all its vehicles domestically.
- Cohn blasted that idea along with Trump’s tariffs, saying the president’s latest trade policies could undermine the economic boost from the new tax law.
President Donald Trump has an imposing vision for the future of automobile manufacturing in the US, according to his former top economic adviser.
Gary Cohn, who left Goldman Sachs to become the director of the National Economic Council, recounted Trump’s economic thinking during a Washington Post panel on Thursday. To illustrate the president’s desire to boost economic growth in the US, Cohn alluded to the president’s thinking on auto production.
“He says: ‘I want to grow the economy. Therefore, I don’t want cars made overseas – I want all cars made in the United States,'” Cohn said, adding that it was not realistic to manufacture all cars in the US.
“He says, ‘I want cars made in the United States – we make great cars in the United States,'” Cohn repeated. “He’s right. We make great cars in the United States. ‘Why would we import cars when if we make cars in the United States, we make more profits, create more jobs?’ Kind of simple.”
Trump appears to have taken action on that philosophy in recent weeks. The Commerce Department launched an investigation into auto imports in May, a move that could eventually result in stiff tariffs on cars and trucks coming into the US.
Cohn warns about tariffs
During the event Thursday, Cohn took aim at Trump’s announced tariffs on steel, aluminum, and some Chinese goods, saying they could wipe out the positive boost from the tax law Trump signed in December.
“If you end up with a tariff battle, you will end up with price inflation, and you could end up with consumer debt,” he said. “Those are all historic ingredients for an economic slowdown.”
Tariffs such as the ones proposed by the Trump administration typically increase the cost of goods for businesses and consumers, meaning prices for everything from beer to cars could go up. The higher prices would then eat away at the increased discretionary spending that comes as a result of the tax bill, which was Cohn’s crowning legislative achievement as part of the White House.
Cohn also questioned Trump’s focus on bilateral trade deficits. The president consistently points to trade deficits, particularly in goods, with partners like China and the European Union as evidence that the US is getting duped.
“I have always said the trade deficit doesn’t matter,” Cohn said. “In many respects, it’s helpful for our economy.”
The trade deficit is typically a function of domestic demand outstripping supply, according to economists, meaning it has little to do with trade deals.