Trump team's message: Don't worry about prices, tax cuts are coming
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A car carrier crosses from Canada into the U.S. Photo: GEOFF ROBINS/AFP via Getty Images
Trump administration economic officials had mixed message for consumers Sunday: Tariffs won't raise prices, but even if they do you'll be fine when we cut taxes.
Why it matters: The administration is gambling an increasingly unhappy consumer will eat a few months of worsening conditions for the promise of something better down the road.
The big picture: Sentiment is plunging across the board — not just consumers, but also small businesses and some big ones too.
- Anecdote-driven "soft" economic data has been negative for weeks, and now the "hard" data that shows the underlying performance of the economy is slipping too.
What they're saying: On Fox News Sunday, Trump's senior trade counselor Peter Navarro deflected multiple questions about the president's auto tariffs potentially raising the cost of cars by thousands of dollars.
- "The reason why we're not going to see inflation is because the foreigners are going to eat most of it, they have to, we're the biggest market in the world," he said. "They have to be here. They have to be here, So they're going to cut their prices to absorb that."
- Navarro stressed that whatever economic pain consumers feel in the short term will be offset by the tax bill the administration is negotiating — mostly extending Trump's 2017 cuts, but with some new benefits, like cutting or eliminating taxes on tips.
- ""If you look at this basically holistically, as they say, consumers and Americans are going to be better off, including all the jobs they get."
The intrigue: The tax bill isn't done, and is part of the larger fight on Capitol Hill about the budget and debt ceiling.
- There are "extraordinarily high" odds a tax bill will pass this summer, National Economic Council director Kevin Hassett said on Fox's "Sunday Morning Futures."
- "We've got the biggest, most pro-worker tax cut in history that's moving forward at a breakneck speed," he said. "I think the naysayers will be proven wrong if they're a little bit nervous about the blips from this week to next."
What to watch: On Wednesday Trump is expected to unveil his long-awaited reciprocal tariffs, potentially against dozens of countries.
- Both Navarro and Hassett declined to detail the size and scope of those coming tariffs, saying the decision was ultimately Trump's.
