Economist says Trump's tariffs are a 'win-win strategy' to negotiate trade deals
Former Reagan economic advisor Art Laffer said Tuesday on "Varney & Co" that both the world and U.S. would see benefit from President Donald Trump’s tariffs and the trade negotiations that arise out of them.
His appearance on "Varney & Co" came after he and Stephen Moore wrote an opinion piece titled "A Win-Win Exit Strategy for Trump on Tariffs" that was published Monday in the Wall Street Journal.
"The win-win strategy is Trump is just phenomenal at negotiating," Laffer said Tuesday, adding that he agreed with President Donald Trump that foreign countries getting hit with the president’s latest levies "have far higher tariffs and non-tariff barriers and quotas than we do."
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"But what he’s done now is he’s gotten them in a position where they’re going to lose their access to the U.S. market if they don’t redress these types of inequities that they’ve done," the former Reagan economic advisor continued. "And Trump is a master negotiator, and I’m watching these people calling into Trump — this is exactly what he does beautifully and wonderfully — and I believe he can negotiate freer trade deals, get those tariffs way, way down, much lower than they are now, by primarily those people lowering their tariffs and us keeping ours low or even going lower, and it’ll be a win, win."
Last week, Trump unveiled new tariffs on goods imported from foreign countries, including a baseline levy of 10% and "individualized higher tariffs" on certain countries holding large trade deficits with America.
Treasury Sec. Scott Bessent told FOX Business’ Larry Kudlow on Monday that "there are 50, 60, maybe almost 70 countries now who have approached us" about negotiating trade in the wake of that.
"The world will prosper. We’ll have a great economy, and the U.S. will be in perfect, beautiful shape for economic growth," Laffer said of negotiating new trade deals out of the tariffs.
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He said Trump "has already" threatened the tariffs to make countries willing to negotiate.
"Now the exit strategy is he doesn’t impose those tariffs. He takes those tariffs away. He even reduces our tariffs on those countries if they will eliminate their tariffs on us, and that would be the exit strategy, which would be a win, win, win, win."
Laffer warned if the tariffs go into effect, remain in force for a long time and "we have a huge escalation of tariffs," it would be a "disastrous" for both America and the world economy.
Trump "should be able to negotiate getting rid of tariffs for them and for us."
"Everybody loses in trade wars, but we all don’t lose the same amount. Americans will lose a lot less than the foreigners do, so therefore, they have an incentive to come down to the table and really drop their tariffs on our products," he also said. "It will help them as well, too. Stuart, I mean, their tariffs on our products hurt their countries."
The reciprocal import tariffs are slated to go live on Thursday. The baseline 10% levies went into force late last week.
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The White House said in an April 2 fact sheet that they will stay in place "until such a time as President Trump determines that the threat posed by the trade deficit and underlying nonreciprocal treatment is satisfied, resolved, or mitigated."
Israel, Japan, Vietnam, Argentina and Indonesia are among some of the countries that are pursuing negotiations with the Trump administration.