German Central Bank Warns Trump's Tax Reform Would Hurt U.S. Economy In Long Run

By Rachel Koning BealsMarketsMarketWatch Pulse

Germany's central bank on Monday said President Trump's tax plans may provide a short term boost but would likely hurt the U.S. economy and lead to a 30 percentage-point increase U.S. debt-to-gross domestic product ratio within a decade. The comments, published in the Bundesbank's monthly report, are a rare commentary by the German central bank specifically on U.S. economic policy. They come amid tensions between Berlin and the new U.S. administration over German trade surpluses. In a rough blueprint published last month, the Trump administration pushed for cutting the corporate tax rate to 15% from 35% and reducing some income and estate taxes. The plans face a tough battle in Congress, where some lawmakers are worried about adding to large budget deficits.

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