Sweeping tariffs under consideration by Donald Trump could cause “massive” increases to the cost of producing everyday goods including coffee and chocolate, President Biden’s top economic advisor said Thursday.
On the campaign trail, Trump vowed to impose broad tariffs of at least 10 percent on all imported goods entering the United States, and higher rates on goods from China, Canada and Mexico.
Speaking at the Brookings Institution, White House National Economic Council director Lael Brainard said across-the-board tariffs were bound to have “unanticipated” supply chain effects.
“US manufacturers do rely on foreign imports for certain parts of their key inputs,” she said.
“So you could see a real, massive change in their cost structures, which would lead to massive increases in their prices.”
“And that, of course, works its way through to consumers,” said Brainard, a former vice chair at the US Federal Reserve, adding that food items like coffee and chocolate would likely be affected.
President-elect Trump has continued to insist that, “properly used,” tariffs would be positive for the US economy.
“Our country right now loses to everybody,” he said during a press conference at his Florida residence earlier this week. “Tariffs will make our country rich.”
In her remarks Thursday, Brainard also addressed efforts by the outgoing president to ensure the United States protects key industries through measures including targeted tariffs.
“We can’t repeat the mistakes of the past by allowing future core technologies to completely leave our shores,” she said.
“America’s global position in the strategic industries of tomorrow require ongoing active attention.”
She added that the United States needed to work “in partnership with the private sector” to address key bottlenecks like computing power.
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