Former US officials warn of tariff impact

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Added On May 22, 2019

 Jacob Lew served as secretary of the Treasury from 2013 to 2017.

 
He said escalating trade tensions between the world's two largest economies would cause disruptions in global supply chains.
 
SOUNDBITE (English): JACOB LEW, Former Secretary of US Treasury
"If there is a full-blown trade war, I think you have to assume there will be spillovers that are very hard to predict, disruptions in supply chains, disruption in long-standing relationships of trust and the ability to do business. And then it spills over into geopolitical risk, which has a life of its own in terms of creating uncertainty. Uncertainty is not a great ingredient in a 10-year old recovery."
 
Lew also said that the trade war poses long-term risk to the U.S. economy and conveys a disconcerting message to those seeking to do business in the country.
 
SOUNDBITE (English): JACOB LEW, Former Secretary of US Treasury
"I think the long term risk to the U.S. economy is quite, quite substantial. I think the kind of go-it-alone approach taken with unilateral tariffs, and frankly with some of the unilateral sanctions decisions, has created kind of blinking yellow lights around the world. That is cautioning others from doing business where after seventy years of being the unquestioned center, there's starting to be a shopping-around for alternatives."
 
Donald Kohn, a 40-year veteran of the U.S. Federal Reserve System, said the global stock markets and broader financial market would bear the brunt of any turbulence in U.S.-China trade relations.
 
SOUNDBITE (English): DONALD KOHN, Former Fed Vice Chairman
"We see the stock market go up and down with every rumor about what's happening to this Chinese trade deals. So if it doesn't happen and then I think the stock market and financial markets would also react to the potential for the same thing happening with Europe."
 
Kohn said the U.S. has a trade deficit because the country is spending more than it produces, and it is importing stuff to satisfy the spending which they do not produce domestically.