Art Laffer, an economic adviser for President Ronald Reagan, explained on Thursday why it’s not accurate to characterize the United States’ current tariff battle as a “trade war.”
“Has this become a trade war?” CNN anchor Poppy Harlow asked Laffer.
“I don’t think it’s a trade war,” Laffer replied. “Although goodness knows it could escalate into one.”
“But if this isn’t a trade war, what is?” Harlow pressed. “I mean, help me understand how you would define a trade war then.”
“Well, I was in the White House in [the] 1970s when Nixon put on the 10 percent surcharge, we had the job development credit that excluded foreign-made capital, we devalued the dollar — that was a trade war, that led to a 50 percent collapse in the stock market. One of the worst economies,” Laffer explained. “What’s going on in Japan right now versus the rest of the world — that’s a trade war.”
President Donald Trump and European Commission chief Jean-Claude Juncker agreed on Wednesday to work toward zero tariffs after a tense round of negotiations. (RELATED: EU Backs Down After Trump Tariff Threat)