The impact of the U.S.-China tariff battle will be passed on to U.S. consumers in a form of a $100 billion tax bill, according to a former Obama economic adviser.
Continue Reading Below
“If you want to get into a fight with a cable company, you don’t burnt down the back half of your house as a protest,” Austan Goolsbee said on “Making Money” Tuesday. “If you want to get in a fight with the Chinese about intellectual property, you don’t put a $100 billion tax on the American consumer.”
The Trump administration states that Beijing will bear the brunt of the latest round of tariffs on Chinese goods. Goolsbee argued that the industries most affected by the trade conflict between the two largest economies have nothing to do with the American economy.
“85 to 95 percent of the U.S. economy has nothing to do with China, they're domestic services and those are doing well,” he told FOX Business’ Charles Payne.
Payne asked the economist why the White House should continue not continue its aggressive stance against the trade imbalance with China, a case the Obama administration admitted is worth fighting.
Although Goolsbee agrees that the U.S. shouldn’t allow China to steal American intellectual property, he rather welcome the support of European allies to levy a trade agreement.
“The answer to that is to get some allies together, not to go threatened trade wars against all the allies you need to enforce that,” he said.
In 2017 Trump withdrew from the Trans-Pacific Partnership (TPP) trade pact signed in 2016 by the United States and 11 other Pacific Rim countries. The treaty would have governed around 40 percent of all trade covered by World Trade Organization rules and included tariff reductions, strengthened labor and environmental standards, and framework for managing e-commerce, cyber security, intellectual-property rights and data mobility.