Yellen’s Warning on Trump’s Economic Policies

Treasury Secretary Janet L. Yellen is set to deliver a pivotal speech on Thursday, cautioning that the economic strategies proposed by former President Donald J. Trump could exacerbate inflation and negatively impact American businesses. This warning comes as concerns grow over the potential repercussions of broad tariffs, which would affect both allies and competitors alike.

In her upcoming remarks to the Council on Foreign Relations, Yellen’s critique arrives just weeks before the presidential election. It highlights the contrasting economic outlooks presented by Mr. Trump and Vice President Kamala Harris. While Yellen is not anticipated to mention Trump directly, she will emphasize that sweeping tariffs, advocated by him and some Republican leaders, pose significant risks to the U.S. economy.

Yellen plans to assert, “Calls for walling America off with high tariffs on friends and competitors alike, or treating even our closest allies as mere transactional partners, are profoundly misguided.” She will further argue that “untargeted tariffs would inflate prices for American families and diminish the competitiveness of our businesses.”

During his presidency, Trump enacted tariffs on hundreds of billions of dollars’ worth of foreign goods, but his proposals for a potential second term could be substantially more aggressive. In previous discussions, he has floated the idea of imposing tariffs ranging from 10% to 20% on a wide array of foreign products, along with tariffs exceeding 60% on imports from China, in addition to other levies.

This week, Trump went even further, suggesting he might impose universal tariffs as high as 50% to incentivize foreign companies to relocate their production to the United States, thereby circumventing these fees. “The most beautiful word in the dictionary is tariff,” Trump stated, adding with enthusiasm, “It’s my favorite word.”