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Tags: larry kudlow | free trade | economy | growth

Kudlow Urges US to Become 'Most Hospitable Spot for Investment'

Kudlow Urges US to Become 'Most Hospitable Spot for Investment'

By    |   Tuesday, 15 March 2016 10:10 PM


The Republican hopefuls seeking to win the White House vow to spark economic growth by lowering taxes, but they also must embrace free trade to do so, says CNBC Senior Contributor and Newsmax Finance Insider Larry Kudlow

“Between the early and mid '80s and the end of the '90s we had free-trade agreements, Clinton was for them, Reagan was for them. Created close to 50 million new jobs. That's an important stat,” he recently told CNBC.

“What's not good is that everybody in both parties is against trade because that's what the polls show,” he said. In the recent Michigan Republican primary exit poll, 33 percent said trade expansion would create more U.S. jobs while 54 percent said it would take away U.S. jobs, he said.

Donald Trump has said other countries are unfairly taking advantage of the U.S. through a combination of high taxes on American products and devaluing their own currencies. The billionaire has urged extreme tariffs — 35 percent on Ford vehicles from Mexico and 45 percent on Chinese goods — to help the U.S. regain the upper hand. But Kudlow thinks a 45 percent tariff would be a major tax on American consumers and businesses. It would probably do more damage to the U.S. economy than to China’s.

Instead, Kudlow says we need "a very strong U.S. president" to enforce current trading laws between the U.S., China, and the World Trade Organization.

He said China is a major trade violator. “The Chinese break all the rules. They counterfeit our goods, steal our international property rights, and cyber-hack our industries and government. Something must be done about it,” he said.

“The issue with trade is not tariffs and banning trade to wreck the economy. The issue is enforce the rules, don't cave in. And the second issue is where necessary, sanction a company,” he said. For example, the U.S. has decided to sanction Chinese telecom giant ZTE for trade violations with Iran.

Kudlow also has applauded Trump’s business-tax-cut strategy, which includes a 15 percent rate along with easier repatriation and cash-expensing write-offs for new business investment.

Kudlow thinks it is an excellent plan that would substantially grow the American economy and bring trillions of dollars in overseas capital back to the U.S., which in turn would foster millions of new jobs and faster growth.

In the past century, he explained that the American economy grew at roughly 3.5 percent per year. But during the past 15 years, that growth has slumped to roughly 2 percent per year.

“What we need is growth in the United States. Be the most hospitable spot for investment, which will then create good paying jobs. We haven't had that,” he said. “If you penalize with taxes and regulations you won't get it. If you penalize investors with high tax rates they won't invest,” he said.

“We need business investment. The private sector creates the jobs. Democrats and Republicans, the Senate, House, White House all have neglected business investment. We've not had any incentives and the businesses do not want to grow,” he said.

If the government would only embrace lower taxes and fewer regulations for U.S. businesses, “trillions of dollars will flow back to America,” he said. “And that's where your jobs are going to come from.”

© 2022 Newsmax Finance. All rights reserved.


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Republicans seeking the White House aim spark economic growth by lowering taxes, but they also must embrace free trade to do so, says CNBC Senior Contributor and Newsmax Finance Insider Larry Kudlow
larry kudlow, free trade, economy, growth
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2016-10-15
Tuesday, 15 March 2016 10:10 PM
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