CNBC's Joe Kernen admits Trump's universal tariffs “could be inflationary”
Kernen: “It's an effective argument” that Trump's tariffs would be “just taxing American consumers”
Published
Citation From the September 24, 2024, edition of CNBC's Squawk Box
ANDREW ROSS SORKIN (CO-HOST): As it relates to the tariffs, because you talked about strategically using the tariffs. At least our understanding of it, and a lot of the way these tariff proposals have been quote-unquote “scored” by economists is a broad tariff plan, not necessarily one that looks by an industry-by-industry or even item-by-item. And I think one of the reasons people say, "well that could be a tax on the American public" is there are industries unfortunately, which we, the American public, are not in manufacturing yet. And so the question is, yes, it would be great to induce more folks to manufacture here, but the time it may take to actually get that to work in a meaningful way is going to have at least a short-term cost, if not a longer-term cost, right?
JOHN PAULSON (TRUMP CAMPAIGN ADVISER): Yes. So, I think the 10% is an average tariff. Tariffs will be allocated strategically. First, to industries that are essential for our American industrial base and for defense industry. We can't buy critical minerals from potential adversaries. Second, we have to level the playing field in industries that we haven't had fair competition. And using tariffs will restore a level playing field.
BECKY QUICK (CO-HOST): Well, yesterday, he [Trump] leveled it at John Deere, too. I mean, that was — are we going to see one-offs? You're talking about an orderly form.
PAULSON: Well, that would be an example — yeah, that would be targeted. We want to keep American companies manufacturing in the U.S. And if they're going to close U.S. factories, to relocate abroad, particularly in Mexico, take advantage of their cheap labor, fire American workers. That's not a policy that Trump wants to support. And I think it makes a lot of sense.
JOE KERNEN (CO-HOST): But it seems like some of that — some of it could be inflationary, if it was, you know, not done carefully. The other thing that we have so much disagreement on, just in the economic literature, is who pays tariffs. And when that criticism is levied that it's the American consumer, not China or somebody else that's going to pay the $450 billion, and it's going to be through higher prices and that's going to cause inflation, how do you counter that? And it's an effective argument they use. They just roll their — there's an entire group of economists and voters who roll their eyes when they think that you can tax other countries instead of just taxing American consumers with tariffs.