WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Tuesday she is concerned that President-elect Donald Trump’s plans to impose broad import tariffs could derail progress in curbing inflation and increase costs for families and companies.
Yellen, at a Wall Street Journal CEO Council event, also said she is concerned about U.S. fiscal sustainability and said Congress needs to look for ways to pay for any extensions of Trump’s individual and small business tax cuts signed into law. in 2017, which are set to expire in 2025.
Trump’s plans to impose new tariffs of 60% on Chinese imports and 10% to 20% on products from other countries would “significantly increase prices for U.S. consumers and create cost pressures” on companies,” Yellen said.
“Therefore, this would have an adverse impact on the competitiveness of some sectors of the US economy and could significantly increase costs for households,” Yellen added. “So this is a strategy that I fear could derail the progress we have made on inflation and have adverse consequences for growth.”
Regarding the US fiscal framework, Yellen said that extending all expiring measures from the 2017 Tax Cuts and Jobs Act would add $5 trillion to US deficits over 10 years, and that Congress would need to find offsets. to avoid an “explosion” of debt.
The Biden administration has recorded a $1.83 trillion budget deficit for the 2024 fiscal year ending September 30, the largest outside of the Covid-19 era, with debt interest costs surpassing $1 trillion for the first time .
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“I am concerned about fiscal sustainability and regret that we have not made more progress,” Yellen said. “I believe the deficit needs to be reduced, especially now that we are in a higher interest rate environment.”
(Reporting by David Lawder and Eric Beech)
