Larry Kudlow, the President’s chief economic adviser, once said Donald Trump’s proposed policies on trade would lead to a bad recession, cause “incalculable damage” to the economy and kill consumers and businesses alike.
Kudlow made those comments in 2015 on the Larry Kudlow Show, a radio program he hosted before joining the White House in March 2018. Trump at the time was in the early stages of his ultimately successful campaign to secure the Republican nomination and eventually the presidency.
In segments on his show, Kudlow said the tariffs Trump then sought and has now moved to impose on China and Mexico would damage the US economy enormously – and also said that Mexico’s government was not to blame for undocumented immigrants coming to the US.
The comments from Kudlow harshly contradict the administration’s current positions on trade, which Kudlow is now tasked with publicly defending. In the past month, Trump has proposed a 5% tariff on all goods from Mexico starting on June 10 and raised tariffs on Chinese imports to 25% from 10%.
Kudlow stood by the administration’s current policies in a phone interview with CNN’s KFile this week.
“That was then and this is now,” Kudlow said. “I think his trade policies with China in particular have been very strong. They are not damaging the US economy.”
Asked about his past criticism, Kudlow claimed he was speaking hypothetically.
“Those were worst case scenarios, it was all hypothetical,” he added. “We don’t know what’s going happen with Mexico.”
’He will destroy the dollar’
Kudlow in August 2015 said Trump’s trade policy threatened “incalculable damage” to the US economy which would destroy the dollar.
“Donald Trump, he is a protectionist. He will jack up tariffs and those are higher tax rates and they will pose incalculable damage on our economy. He will destroy the dollar. That’s basically been his message, if anybody cares to look at it,” Kudlow said, linking high tariffs to the Great Depression.
“You slap a 25%, 35% tariff on our leading trading partners like Mexico and China. We may not like them, sir, but tariffs and protectionism is not the answer,” he later added. “It will do incalculable damage to the American economy. Okay? We will cut off our nose to spite our face and that is not the right policy….We don’t need this. This will backfire on America and the rest of the world.”
In July 2015, Kudlow linked trade protectionism to the Great Depression.
“He wants to stop trading with China. He wants to stop trading with Mexico. Lord knows who else he wants to stop trading with,” he said. “These are huge trading partners of ours. There are political issues that need to be resolved, but you never cut off your nose to spite your face, do you? That’s what Trump is doing. Too many Republicans are flirting with protectionism. Protectionism is anti-growth, protectionism, protectionism led to the depression of the 1930s.”
“Lower tariffs equals lower taxes equals growth,” Kudlow said. “In the 1930s high tariffs, Smoot-Hawley tariffs, equals high taxes, equals depression. It’s that simple. Too many Republicans on the campaign trail are flirting with protectionism. Trump is the worst, but he’s not the only one.”
The Smoot-Hawley Act imposed tariffs on goods being shipped to the United States in 1930s. It was named for two Republicans members of Congress, Rep. Reed Smoot and Rep. Willis Hawley.
On his August 2015 program, Kudlow called out Trump and other candidates on trade policy.
“Mr. Trump, Mr. Santorum, Mr. Huckabee and others I fear. You want protectionism that means you want another bad recession,” Kudlow said.
“This anti-immigration thing has gone way too far”
Speaking on his show in July 2015, shortly after Trump launched his campaign, Kudlow said he did not believe that Mexico was responsible for undocumented immigration.
“This anti-immigration thing has gone way too far,” Kudlow said. “For example, Donald Trump is blaming the government of Mexico several times for sending us these terrible people. First of all, the government of Mexico has nothing to do with sending us anybody.”
“It’s not the government of Mexico, let’s remember this before we get so protectionist, the United States and Mexico have very close relations,” he continued. “They’re an important partner. They are our second biggest export market, right? Our third biggest trading market after Canada and Japan and China rather. And literally, literally millions of Americans go to Mexico for tourism and vacation and millions of American retirees live in Mexico because it’s cheaper and rather pleasant.”
“How’s this guy going to negotiate with anybody, whether it’s China, whether it’s Vladimir Putin, whether it’s the mullahs. He can’t even get the story right on Mexico. He can’t even distinguish between the good and bads on Mexico.”
Kudlow would later go on to informally advise Trump on his economic policies during the 2016 presidential campaign, specifically related to taxes, and Kudlow toned down his criticism.
An avowed advocate of free trade, Kudlow joined the Trump administration after his predecessor, Gary Cohn, quit in protest over Trump’s tariffs. Kudlow has now spent his time in the White House trying to keep markets calm no matter what his boss does – even if it risks damaging the US economy. Speaking on Fox News Sunday in early May, Kudlow defended Trump’s trade policies, but acknowledged under questioning that “both sides” would pay for administration’s proposed tariffs.
“We have had unfair trading practices all these years, and so in my judgment, the economic consequences are so small that the possible improvement in trade and exports and open markets for the United States, this is worthwhile doing,” Kudlow said.