Former Federal Reserve chairman Alan Greenspan warned Wednesday that although he believes the U.S. is on the brink of a trade war he dismissed urban legend that America is being ripped off by foreign countries.
Asked if he thought the country was in a trade war, Greenspan told CNBC that "we're on the edge. I think we should be very sad if we do, because the presumption is that foreigners are ripping us off. It's nonsense."
The former central bank chief told CNBC that President Donald Trump has the situation "reversed" as it pertains to global trade issues.
Greenspan doesn’t worry that tariffs between the U.S. and its trading partners will put much of a dent in an economy.
Greenspan touted the Trump tax cut and the president’s quest to eliminate business regulation as ery beneficial to the economy.
“If it wasn’t for those factors, we’d really be in the soup,” he said."The fact is, I happen to approve some of the policies which this current administration is doing," Greenspan said. "The extraordinary cut in the marginal corporate tax rate was a very important thing. I never thought I would see it in my lifetime, but they pulled it off. It's working, and it's having an effect," he said.
"What I don't think is going to be happening over time is GDP that stays close to the 3 percent, and the essential reason is that ... entitlements are crowding out gross domestic savings," he said.
Meanwhile, U.S. Senator Bob Corker accused his fellow Republicans of being afraid to stand up to Trump on Tuesday, as his legislation to block the president’s ability to impose tariffs on national security grounds hit a roadblock in Congress, Reuters explained.
“‘We might poke the bear’ is the language I have been hearing in the hallways,” Corker said in an emotional Senate speech. “The president might get upset with us as United States senators if we vote on the Corker amendment, so we’re going to do everything we can to block it.”
Corker and other lawmakers - Democrats as well as some of Trump’s fellow Republicans - introduced the measure last week after the president’s recent announcement that he was considering tariffs on automobiles, after imposing tariffs on steel and aluminum, citing national security concerns.
Trump, who campaigned on a pledge to negotiate better trade deals to bring back U.S. manufacturing jobs, has pursued aggressive measures against trading partners from China to Canada, Mexico and U.S. allies in Europe.
This has worried some lawmakers who strongly back principles of free trade, warning that Trump could trigger a trade war that would destabilize the economy and ultimately hurt American workers.
Corker’s amendment would have pared back Trump’s authority under Section 232 of the Trade Expansion Act of 1962 to impose tariffs on national security grounds without obtaining Congress’ consent.
Its backers had hoped for a Senate vote as soon as this week by including the legislation as an amendment to the National Defense Authorization Act for 2019, or NDAA, a sweeping defense policy bill that Congress passes every year.
(Newsmax wire services contributed to this report).
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