Larry Summers, former U.S. Treasury Secretary, said that President Donald Trump’s trade policies will cause the most harm to those who supported Trump for president.
"The very people who voted for Trump will suffer because we will have a larger trade deficit, not a smaller one, because of the fiscal policies. We are going to have more disruption through reduced competitiveness and more layoffs because the manufacturing firms cannot compete due to higher steel prices. We will have lower purchasing power of wages because of higher prices due to Trump’s policies," Summer said in an interview with Spiegel.
"The people who voted for him will find that his policy is directly opposed to their interests," said Summers, who was treasury secretary during Barack Obama’s administration.
Trump’s sanctions and comments against China will not work, the former secretary said. “There is not much in the historical records to suggest that these kinds of bluster and threats will be effective. It is an extraordinarily negative achievement of our economic diplomacy that we have our traditional allies being more sympathetic to China than to us because we are sanctioning them," Summers said in the Spiegel interview.
The former treasury secretary said that current secretary Steven Mnuchin could not defend Trump’s policies. "Steven Mnuchin has gone silent on trade issues because he knows there is nothing rational that can be said in defense of the choices that the president has made," Summers said.
Summers also criticized Trump’s economic policies earlier in June, calling them "unstrategic and ineffective."
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