Investors have reacted poorly to President Donald Trump's tariff plans as markets price in inflation and the SPDR S&P 500 ETF Trust
National Economic Council Director Kevin Hassett defended Trump's tariff decisions in an appearance on CNBC Monday morning.
"If you run it out over 10 years, the amount of tariff revenue that we've already collected... adds up to about a trillion dollars over 10 years, a trillion dollars we could use to give everyone a tax cut or reduce the deficit," Hassett said.
Tariffs are taxes paid by American importers that are often passed along to consumers through price hikes. Opponents of Trump's tariffs say his plans are inflationary and have already damaged financial markets. Although some countries, such as Canada, have responded negatively to Trump's tariffs, Hassett expects others to change their policies.
"Our expectation is there will be a lot of countries that do respond favorably to President Trump's negotiations. President Trump is very flexible, he says that over and over, but my guess is there's going to be a lot of countries that don't... the countries that don't are going to have to pay the tariffs," Hassett said.
Economists and experts are largely opposed to Hassett's insinuations to replace income taxes with tariffs, citing tariffs' regressive nature that will leave low-income Americans paying more for goods.
Hassett says that between now and April 2, when Trump plans to implement reciprocal tariffs on other countries, "there will be some uncertainty" but thinks markets will see that Trump's plans "make a great deal of sense."
