The economy grew only 2.3 percent in 2019, marking the weakest annual GDP growth since President Trump took office. This muted economic growth is clearly due in part to the impact of tariffs put in place as result of the misguided trade war.
As Axios Markets pointed out, tariffs “remain largely in place even after the ‘phase one’ deal.”
This is troubling because the Congressional Budget Office’s report is predicting that GDP will be even lower in 2021.
This morning, the Wall Street Journal Editorial Board wrote that trade friction is the culprit as to why GDP growth was so slow.
“President Trump promised to lift the economy above the 2% growth trend of the Obama years, and for a while tax reform and deregulation did the trick. But his trade and tariff forays undermined business investment and global manufacturing, and the economy is now back down to a 2% growth plateau.”
Experts agree. As reported in Bloomberg, Kevin Cummins, senior U.S. economist at NatWest Markets noted that trade uncertainty continued to weigh on companies.
“The outlook for the business investment side of things is pretty dark,” Cummins said.
“While President Donald Trump asserts that other countries pay US tariffs, evidence shows that the majority of costs fall onto domestic businesses and consumers.”
All tariffs must be lifted to promote economic growth and benefit American consumers, businesses, and workers.