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Larry Summers: US Economic Policy Under Trump 'Ineffective'

Larry Summers: US Economic Policy Under Trump 'Ineffective'
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By    |   Tuesday, 05 June 2018 11:08 AM

The United States' economic policy under President Donald Trump is "unstrategic and ineffective," Lawrence Summers, who was an economic adviser during the Obama administration, wrote in a column for The Washington Post. 

"President Trump has put aggressive trade policy at the center of his approach to the economy…. This is problematic, however, as most economists agree that changes in trade policy are unlikely to have large effects on either employment growth or gross domestic product, and that liberalizing trade is likely to do more for U.S. prosperity than managing trade," Summers wrote.

The president's "mercantilist premise" is that opening up markets should be the central priority, and "given this dubious judgment about ends, the United States is proceeding in a remarkably unstrategic and ineffective way. Indeed, it is violating almost every strategic canon," Summers wrote.

Strategy requires "well-defined objectives," which the Trump administration does not have, Summers wrote.

"From tweet to tweet, and senior official to senior official, it is impossible to know what this administration's priorities are," Summers wrote.

"A second rule of strategy is to unite your friends and divide your potential adversaries. The United States seems to be doing the opposite," Summers added, pointing out that Trump alienated Asian allies by ending the Trans-Pacific Partnership and angered Group of Seven allies by placing tariffs on steel and aluminum.

Another strategic rule is to offer threats that could credibly hurt opponents, Summers said, adding that steel tariffs fall into that category. The Trump administration's trade policies will increase prices for Americans, and reduce the competitiveness of the U.S. economy, Summers wrote.

"The sooner they are radically revised, the better off the United States and the rest of the world will be," Summers wrote.

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Lawrence Summers, who was economic adviser during the Obama administration, said President Donald Trump's economic policy is "unstrategic and ineffective."
larry summers, trump, economic, policy
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2018-08-05
Tuesday, 05 June 2018 11:08 AM
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