Experts fear that the president’s economic policies could increase costs and stifle innovation.
President Trump won his office twice by promising to turbocharge the American economy and restore its global dominance over international competitors. This week, he turned back to his favorite tool, dealing out threats of tariffs like a blackjack dealer confident that the house always wins.
“Tariffs are making our country ‘BOOM,’” Trump wrote on his social media site yesterday, where he also pronounced the country the “hottest” in the world.
Economists and industry experts, though, warn that Trump’s sweeping changes to the economy and the country may have the opposite effect, potentially positioning the United States to be less competitive on the global stage.
The tariffs are just one pillar of Trump’s industrial policy. Tonight, I’m taking a look at that aspect, as well as two others, and I’ll explain why some experts fear that six months of Trumponomics could stifle a key driver of American competitiveness: innovation.
Trade restrictions like tariffs are a longstanding strategy for presidents who want to strengthen or bring back domestic industries, a goal that can bolster national security objectives as well as economic ones. Robert Atkinson, the president of the Information Technology and Innovation Foundation, told me that tariffs could increase national competitiveness — but they come with risks, too.
Tariffs can wall off the American market while other countries trade freely with one another. And they can raise the prices of the goods American companies need to import in order to make their products, forcing them to reckon with higher costs, which their foreign competitors might not face.
