- Former Treasury Secretary Larry Summers has come out as one of the fiercest critics of President Trump’s “Liberation Day” tariffs. The economist said an hour of rhetoric has likely never caused so much economic damage, and that families would take a hit of $300,000 per year.
Former Treasury Secretary Larry Summers says President Trump’s tariffs would be a disaster for families and could cost them hundreds of thousands of dollars a year.
Summers, who helmed the Treasury Department under former President Clinton, fiercely criticized Trump’s so-called “Liberation Day” tariffs.
“Trump’s tariffs are the most expensive and masochistic the US has pursued in decades,” he wrote.
In a later post, Summers said the policy would cost American families dearly.
“Never before has an hour of Presidential rhetoric cost so many people so much. Markets continue to move after my previous tweet. The best estimate of the loss from tariff policy is now is (sic) closer to $30 trillion or $300,000 per family of four,” he wrote in a post on X.
Summers elaborated in an interview with CNN, saying that it’s unprecedented that a presidential action causes such a big collapse in the stock market. Often, a stock market downturn of such gravity is caused by external factors, such as the coronavirus pandemic in 2020, he added.
“This action has taken $3 trillion off the stock market as a consequence of an hour of rhetoric. The stock market reflects only part of the economy. So if you took the cumulative loss, extrapolated from the stock market, it’s closer to $30 trillion. That’s more damage than any economic policy pursued by any president in the last—probably in American history,” he said.
On Friday, the stock market rout continued as China levied 34% tariffs on American exports in retaliation. All major indexes were down as of Friday afternoon, with the the S&P 500 leading the losses with a 4.5% drop. The tech-heavy Nasdaq and the Dow Jones were down 4.2% and 4.4%, respectively.
Summers has often criticized President Trump on matters related to inflation and not focusing on helping the poor, he said in the CNN interview, yet his most recent action on tariffs worries him the most.
“RIght now my primary concern is a lack of basic competence,” he said. “There is no coherent logic to these policies,” he added.
Indeed, the White House confirmed the tariffs were calculated using a relatively simple formula, and the U.S. Trade Representative’s office iclaimed the method was an accurate way to proxy the complex considerations of tariff, regulatory, and tax policies.
Summers is not alone in his criticism. Economic experts and major bank analysts are in rare agreement on the fact that if Trump maintains the tariffs as they were presented Wednesday, economic pain and possibly a recession could hit the U.S.
Still, Trump on Friday gave investors a small sign of hope by saying he had a call with Vietnam leader To Lam who wants to negotiate the eye-popping 46% tariff rate imposed on it by the U.S.
“Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S.,” Trump wrote on Truth Social Friday.
This story was originally featured on Fortune.com
