Newsmax Finance Insider and renowned economist Larry Kudlow says the United States needs a "tough guy" to enforce free-trade agreements and keep other nations, such as China, from stealing American jobs.
“The World Trade Organization has no teeth. We need fangs,” he said. “We need a tough guy who will put some enforcement in there,” he told CNBC on Thursday.
“What you have to do here is enact an enforcement mechanism that will put sanctions on individual companies wherever they are, whether it's China or Mexico, if they are violating the rules — which they do,” Kudlow, a CNBC senior contributor, said.
“That's my beef about China and they are not the only ones. They steal our intellectual property rights, counterfeit our goods hack away at our computer system,” 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.
“Tariffs are anti-growth, prosperity killer, they kill business. China cheats. We know that. It is probably costing us jobs, although I think these numbers are overestimated,” he said.
“Tariffs are anti-growth, prosperity killer, they kill business,” he said. “Stop talking about tariffs and start talking about enforcement mechanisms that can solve these problems,” he said.
He said the next president must stand up to China and “then make us tax competitive.”
Kudlow 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.
“The only reason Nabisco is going to Mexico, the only reason these companies have gone China is they pay too much taxes here,” he said.
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