President Donald Trump's trade war with China is backfiring and impacting the U.S. economy, former chief economic adviser Gary Cohn told a British media outlet Thursday.
In remarks on the BBC's Radio 4 Today program, Cohn said the tariff battle has had a "dramatic impact" on U.S. manufacturing and capital investment.
And it has served as "a very convenient excuse" for China to slow down its overheated economy, he added.
During his tenure, Cohn, a Democrat and former president of Goldman Sachs, focused on economic internationalism, while Trump was set on economic nationalism, serving as director of the National Economic Council from January 2017 until his resignation in Match 2018 after Trump decided to slap import tariffs on steel and aluminum.
"I think the Chinese economy is driven by credit and credit availability," Cohn told the BBC outlet. "Credit and credit availability is determined by the central government. And they can turn it on and they can turn credit off."
"I think the Chinese economy was going to slow down with or without a trade war," he told the outlet.
According to Cohn, the idea tariffs would solve trade imbalances between the United States and China was a "long-time view" of Trump's.
"I think everyone loses in a trade war," he told the outlet. "We are an 80% service economy. The service side of the economy is doing very well, because, guess what, it's not being tariffed."
But he noted tariffs have made it expensive to import vital products from China, counteracting the effects of Trump's tax cuts, which were designed to stimulate the US economy.
"When you build plant equipment, you're buying steel, you're buying aluminum, you're buying imported products and then we put tariffs on those, so literally the tax incentive we gave you with one hand was taken away with the other hand," he said.
"So, we are not seeing the manufacturing job creation. And I think if we get through this tariff situation, there's a real opportunity to see it here in the United States."
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