SABEW18-Ross, Hassett address policy impact on economy

Posted By Student Newsroom on Friday April 27, 2018

By Danielle Chemtob and Brian Baker
University of North Carolina and Medill News Service

Trump administration officials defended recent tax reform and tariffs Friday at the Society for Advancing Business Editing and Writing’s spring conference in Washington, D.C.

In two separate sessions, Commerce Secretary Wilbur Ross and Chair of the Council of Economic Advisers Kevin Hassett attributed recent economic growth to tax cuts and deregulation and played down concerns of an escalating trade war over tariffs.

“Some of these other countries have done a far better job at talking free trade, I would call it pretending to be free trade, than we have,” Ross said. “But simultaneously, they have been practicing extremely protectionist behavior. Our objective is to try to have their behavior match their rhetoric.”

Commerce Secretary Wilbur Ross, left, talks with Heather Long of The Washington Post at the Society for Advancing Business Editing and Writing’s spring conference on Friday. Ross spoke about the economic policies of the Trump administration.

First-quarter gross domestic product, announced Friday, increased 2.3 percent, driven by strong business investment, but slowed from the pace of recent quarters. Hassett said the first-quarter rate exceeded his expectations, and he continues to anticipate growth for the full year of about 3 percent.

Ross said the Tax Cuts and Jobs Act, passed in late December, helped drive growth in business spending during the quarter, and he noted companies are starting to bring manufacturing plants back to the U.S. from places like Mexico.

Responding to criticism that the tax cuts only benefited the wealthy and corporations, he blamed the media for causing confusion.

“You keep telling them that the tax cuts are only for wealthy people, not for average working people,” he said to a room of reporters.

Instead, Ross pointed to examples of workers that received a one-time bonus stemming from the tax cuts. The Trump administration claimed in January that 3 million workers had already gotten a bonus as a result of the tax cuts, in line with the findings of Americans for Tax Reform, a group that advocates for lower taxes.

Ross said one of the major objectives of the tariff policy was to provide a boost to a stagnant middle class. But when asked about whether he believed income inequality was a problem in the United States, he didn’t provide a direct answer.

“Our primary objective is [to] make the pie bigger so everybody will get more of it to eat, regardless of what happens to the share,” he said.

The trade deficit fell 10.3 percent to $68 billion during March, according to a report released Thursday by the U.S. Census Bureau.

“Do we think China’s trade surpluses were good for their economy?” Ross said. “Well if trade surpluses are good, how can trade deficits be good, too?”

But in response to the tariffs, China has proposed its own levies on American goods, and they are expected to affect some of Trump’s most loyal supporters: farmers.

“It clearly is not great to have one industry be hit by retaliation for efforts to help other parts of the economy,” Ross said. “On the other hand, if you never take any action because you’re afraid of retaliation, you’re ending up back where you started.”

Austan Goolsbee, who served as an economic advisor to President Obama, once told Hassett that an economist’s trade deal would be one line: free trade.

“The trade deals that we see are thousands and thousands of pages,” Hassett said.

Tariff negotiations are still underway with countries such as Germany and China, and the uncertainty is fueling recent stock market volatility.

“When you see policy uncertainty, you’re going to see volatility,” Hassett said.

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