MW Larry Summers on Trump tariffs: 'This is a stop-or-I'll-shoot-myself-in-the-foot' kind of policy

By Steve Goldstein

Canada has higher minimum wages than U.S., former Treasury secretary says

Former Treasury Secretary Larry Summers minced few words in an interview after President Donald Trump's decision to impose 25% tariffs on Canadian and Mexican goods.

"This is a stop-or-I'll-shoot-myself-in-the-foot kind of threat policy," he told CNN. "It defies economic logic. It means higher prices for consumers. It means much more expensive inputs for American producers."

It should be pointed out that Summers has used that phrase before, to describe Trump's tariffs in his first administration. But the scope of these new tariffs are much higher.

He noted that normally for car manufacturing, the process of getting vehicles produced results in movements across the border five to ten times. "What that's going to do is make the North American companies and the North American jobs less competitive relative to what's happening in Europe or China or Japan. There's no real economic logic to this," said Summers.

He acknowledged there are concerns, particularly with Mexico, about drug cartels. But he said the issues with Canada are minimal.

"Why of all the countries in the world, would we right now be deciding to launch economic war on Canada? Canada where the minimum wage, basic wages are higher, where there's more union protection for workers than there is here. I just do not get the logic of these policies and make no mistake, this is a regressive tax on American consumers," he said.

Summers said other countries are going to respond by favoring European and Asian products over American products. "That's not going to work to our advantage either. They're going to expand by welcoming investment from other countries rather than the United States," he said.

-Steve Goldstein

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February 03, 2025 03:33 ET (08:33 GMT)

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