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Gary Cohn says tariffs are an “important instrument” for a president, but warns of inflationary impact if approach isn’t “methodical”
IBM vice chairman Gary Cohn, who served as former President Trump’s chief economic adviser from 2017 to 2018 and was a director of the National Economic Council, said Sunday that tariffs such as the plan proposed by the former president can lead to inflation if the approach isn’t “methodical.”
The economy remains a top issue for voters as the Nov. 5 presidential election draws closer. The issue also held a front row seat at the Sept. 10 presidential debate as both Trump and Vice President Kamala Harris laid out their plans for the economy. Harris says she’d provide bigger tax benefits for families but would offset the costs by raising corporate taxes, while Trump has said he’d extend the tax cuts enacted in 2017.
Trump’s proposed economic plan also includes blanket tariffs on all imports into the United States, including a 60% tariff on imports from China and a 10% tariff on imports from other nations. The former president doubled down on these proposals last week during the presidential debate.
“Other countries are going to, finally, after 75 years, pay us back for all that we’ve done for the world,” he said.
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Republican vice-presidential nominee Sen. JD Vance also spoke to Trump’s tariff plan Sunday on Face the Nation.
“We want American workers to get tax cuts under President Trump’s policies, and we want to actually penalize companies that are shipping jobs overseas through tariffs,” Vance said. “We should not be allowing slave laborers to benefit from American markets. If you want access to our market, you’ve got to pay our workers fair wages.”
On paper, the proposed tariff hike could cover the cost of tax cuts, which are a cornerstone in Trump’s campaign pledge to end the “inflation nightmare.” But some experts have warned that Trump’s economic policies could stall, or even reverse, progress. They note that tariffs effectively act as a consumption tax, increasing the cost of imported goods into the U.S. which consumers usually feel the weight of on their receipts.
Cohn said Sunday that he finds it “completely reasonable” for the U.S. government to tariff Chinese imports on products the U.S. also produces, like electric vehicles, which the Biden administration announced plans for in May. But he also noted that he does not see the value of tariffs on imports of products that are not manufactured in the U.S.
“We import many products that we do not produce in this country. Those products are in high demand, and we need them. A lot of them are pharmaceuticals, many other products that we expect to have on our shelves when we go in the store,” Cohn said. “If we start tariffing those products, we will have inflation. To the extent that we want to produce those products in this country, we should start out on a very methodical path to do that.”
The former Trump adviser then cited the CHIPS and Science Act as a competitive approach that was “done pretty reasonably.” The CHIPS Act funds the domestic production of semiconductors, and was developed by the Trump administration before being signed into law by President Biden in 2023.
“So we can build chips here, and then we can become self-sufficient on chip manufacturing,” Cohn said. “Then we can tariff foreign chips from flooding our market at a discount price, but until we have the capacity to build them ourselves, putting a tariff on those chips would just be debilitating to our economy.”
As both presidential candidates continue to campaign their economic agendas, the United States Federal Reserve this week is expected to announce its first interest rate cut in over four years since 2020.
Economists told CBS News that Trump’s plans for tax cuts would act as an inflationary fiscal stimulus and that his plans for deporting immigrants could force employers to pay higher wages. In that case, the Fed could be forced to keep its benchmark rate higher for longer.
If consumers “are upset now, they will be hopping mad a year from now” regarding inflation if Trump wins and implements his policies, Mark Zandi, chief economist of Moody’s Analytics and co-author of a June report on the macroeconomic impacts of either a Trump or Biden win in November, told CBS News.
Craig Newmark, the founder of online classified-ads site Craigslist, thinks the U.S. has a cybersecurity problem.
The entrepreneur turned philanthropist has pledged to donate $100 million to help safeguard the country from potential future cyberattacks, the Wall Street Journal first reported. Newmark will allocate $50 million to protect infrastructure, like power grids, from cyberattacks, including from foreign nations. The other half of his donation will be put toward educating the general public about how to safeguard their personal information, according to the report.
Newmark, 71, retired from the company he founded in 2018.
“The country is under attack,” Newmark told the Wall Street Journal. He said that cybersecurity experts who are working to protect the country from attack “need people to champion them.”
Today, many households make use of connected appliances or smart devices that can make them vulnerable to being hacked by criminals. At the corporate level, cyberattacks have become increasingly common.
“In the current cyberwar, the fight is on our own shores, and we all need to play an active role for the protection of our country and ourselves,” Newmark writes on his website.
In June, a hacking group took down CDK Global’s software platform, crippling auto dealerships across the U.S. CDK said that hackers demanded a ransom in order to restore its systems. In February, hackers infiltrated payments manager Change Healthcare, paralyzing segments of the U.S. Health care system. They are but two examples of the tremendous repercussions a cyberattack can have on an industry.
As part of his latest commitment, Newmark, who has pledged to give away nearly all of his wealth to charity, is making donations to a project out of the University of Chicago’s public policy school that trains cybersecurity volunteers to strengthen local infrastructure. Child internet-safety group Common Sense Media, is another beneficiary, according to the WSJ report.
The large majority of the $100 million pledge has not yet been allocated, and organizations can apply for donations through Newmark’s philanthropic organization, Craig Newmark Philanthropies.
On the foundation’s website, Newmark says he likes to donate to organizations that he believes in and lets them spend the money as they see fit. “Okay, what I do is find people who are really good at their jobs, and who can tolerate my sense of humor. I provide them with resources, and then get outta their way,” he states.
In addition to cybersecurity, other causes Newmark champions include support for military families and veterans, safeguarding trustworthy journalism and pigeon rescue.
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Borrowers saddled with higher interest rates on everything from mortgages to credit cards received some welcome news on Wednesday when the Federal Reserve announced a half a percentage point cut to the federal funds rate. That brings the range down to 4.75% to 5.00%, a major reduction from the elevated position the range was frozen at for more than a year.
While it will take some time for that reduction to reverberate, it will inevitably make borrowing cheaper in the weeks and months to come. And with other cuts possible for when the Fed meets again in November and December, borrowing could become even more affordable by the end of the year.
That doesn’t mean, however, that borrowers stuck with high-interest-rate debt should wait for relief. There’s a strong argument to be made that these borrowers should take action now instead. Below, we’ll break down why.
Learn how the right debt relief service can help you here now.
Why borrowers shouldn’t wait for rate cuts to fix their debt
While waiting for rate cuts to echo throughout the economy may be tempting, particularly if you’re suffering from high-rate debt, that could be a mistake. Here’s why:
Rates may not fall dramatically
Credit card interest rates have surged in recent years, averaging over 20% right now. But those rates won’t fall as rapidly as they’ve grown. That’s because credit card rates are determined by a series of complex factors, only one of which is the federal funds rate. And even if credit card rates came down by the same half a percentage point that the federal funds rate did, that’s likely to make very little difference in what you have to pay each month, especially if you’re making minimum payments. So if you’re waiting for the Fed to help reduce what you have to pay on your credit card you could be waiting a very long time.
Start exploring your credit card debt relief options here instead.
Your debt will accrue in the interim
Even if you could rely on multiple rate cuts to come, your existing debt will continue to accrue interest and, possibly, penalties and fees if you’re already struggling to pay what you’ve borrowed. And if you can’t make adequate payments right now, it’ll become even more difficult to do so when dealing with a higher debt total (with compounded interest).
Take a multi-pronged approach
There are multiple debt relief options available right now. From debt consolidation loans to debt management programs to credit card debt forgiveness and even bankruptcy in extreme circumstances, there’s likely a path forward for you now. But that doesn’t mean that you still can’t try to position yourself to take advantage of lower rates. Since rate cuts have broad effects, you may be able to consolidate your debt with a debt consolidation loan now, for example, and then refinance it when rates drop later this year or in 2025. Just don’t sit idle, as debt, no matter the form, can quickly become debilitating if not properly addressed.
Speak with a debt relief servicer now who can help.
The bottom line
It’s never a good idea to let your debt accumulate, even if you’re confident that rate cuts on the horizon could help. Rate cuts, instead, will offer gradual relief, not the significant help you may need. Plus, your debt, fees and penalties will compound in the interim. Instead, consider taking a multi-pronged approach by researching a series of debt relief options that can help you now. And keep rate cuts in mind for the future when you may be able to capitalize by refinancing instead.
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