Trump’s steel, aluminum tariffs will interrupt economic growth: Greenspan

By U.S. EconomyFOXBusiness

Alan Greenspan: Tariffs are essentially a tax

Former Federal Reserve Chairman Alan Greenspan on the economic impact of the Trump administration's trade negotiation strategy.

Former Federal Reserve Chairman Alan Greenspan told FOX Business on Thursday President Trump’s steel and aluminum tariffs will cut into economic growth.

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“[Tariffs] are essentially a tax … and when imposed withdraws purchasing power from the economy,” he said to Maria Bartiromo during an exclusive interview on “Mornings with Maria.

In his opinion the levies are not legitimate.

“When we are looking at the types of tariffs which the administration is suggesting, that does not bode [well] ... for the future,” he said.

Meanwhile the U.S. economy slowed more than expected in the first quarter as gross domestic product (GDP) was revised lower to an annualized pace of 2%. Greenpsan said he averages out first-quarter and second-quarter GDP to forecast economic growth.

“Look forward to something in the middle going forward in the next two or three quarters from now,” he said.

He added that President Trump’s tax cut plan is the biggest driver of growth but also pointed out that entitlements can create potential economic headwinds.

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