Trump's top economist defends trade policies, calls Harley-Davidson to displace an exception

The chief economist of President Trump on Tuesday defended the increasingly aggressive commercial policies of the White House, calling Harley-Davidson's decision to move some operations abroad an exception to the general trend of corporate investment in the United States.

Kevin Hassett, chairman of the Council of Economic Advisers, said foreign direct investment on US soil had "jumped 10 percent" in the first quarter, a trend he attributes to cuts in tax rates in the United States. companies that Trump signed last year. "There is a huge amount of activity at home," Hassett said at a Washington Post event on tax reform. "Harley-Davidson is an interesting story, but if you look at the data, the opposite is happening."

The motorcycle manufacturer in Wisconsin is moving abroad a bit to avoid paying EU – imposed tariffs, and the announcement sparked a furious Trump response on Twitter. The EU's tariffs came in response to Trump's tariffs on steel and aluminum imports, and Harley's move is a high-profile example of the type of economic damage that many economists warn about the fact that it's not the same. a trade war would cause.

At the The Post event on Tuesday, Rep. Kevin Brady (R-Tex.) Echoed concerns over tariffs harming US industry. "I think some of the trade issues are creating uncertainty here," he said. "Certainly in Texas, we see this with local manufacturing in most, as well as our energy industry."

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Trump has long complained that the global trading system is leaning against the United States, and he has promised to change these rules, threatening countries with large-scale commercial take-offs if they do not grant concessions. While some countries have acceded to some of Trump's demands, other major trading partners – including the EU, Canada and Mexico – have responded by issuing retaliatory tariffs on the United States.

Hassett admitted that there may be some turmoil as Trump works to reorganize world trade, but he defended these moves as creating a "more reciprocal" global trading environment. "Uncertainty while trying to reach a certain goal is something that can disrupt markets," he said.

The Harley-Davidson revelation was followed by deep slides on Wall Street. The Harley stock fell nearly 6% on Monday, while the Dow Jones Industrial Average dropped. The fall came amid fears about the effects of a trade war, as US companies fear losing access to foreign markets and paying more for commodities.

The former White House economic adviser, Gary Cohn, who resigned soon after Trump announced the tariffs, warned earlier this month that a trade war could erase the economic gains of the law GOP tax.

A US Federal Reserve survey on US firms in April revealed "robust" job growth at the national level, but also feared that trade disputes would hinder this progress. "Companies generally expect further price increases in the coming months, especially for steel and building materials," according to the report, which summarizes the responses of business leaders from different industries.