The first 100 days of Trump’s second administration were a tornado. And Stephen Miran, chairman of President Trump’s Financial Councilors, was at the heart of what he calls “volatility”. Mr Trump has increased import taxes to levels not observed since the 1930s. And trade talks to bring them back – or not – are in flow, leaving the US economy orbit, consumer prices and global trade in vacuum.
Miran, Ph.D. The Economist who was trained in Harvard-who is known to float the idea of ​​the Mar-A-Lago agreement to “restructure the global trade system”-has been able to explain the President’s thinking and final goals.
On Wednesday, shortly before the United States and Britain announced a framework for trade agreement, and before trade talks this weekend between administration and Chinese officials, Miran spoke with Talmon Joseph Smith at his office next to the White House. And stood by the president’s unusual moves.
The interview is slightly elaborated for length and clarity.
Have you said in public observations that you are not in the negotiating team, but as an economist, do you believe that the economy of this country can maintain what the finance minister has called today’s “embargo” levels of today’s invoices in China?
Yes, so look, the president has acted with a historical scope and speed to put American workers in fair territories over our commercial partners. I do not think that anyone could potentially say that adapting policy was not historical or extraordinary. And therefore, there has been volatility in financial markets. There may also be volatility in economic data, but I think it is important to understand that volatility does not necessarily mean something bigger for the long run.
And so it is possible that economic activity will be replaced from one month to another? Yes. Are businesses waiting to discover the results of the negotiations? Yes. Are they waiting to find out that the tax account has passed and that we will avoid the biggest tax increase in the history of next year, because the tax cuts of President 2017 are not going to expire? Yes, they are waiting for that too.
But when you expect a decision, because you expect information, this does not mean that you make this decision forever.
In China, in particular, the president, in recent days, said that we do not need to make an agreement. This has left the market participants, I speak very confused and consumers are quite scared.
So the president said two things. He said, he believes we will have an agreement. He said it many times. And two, we don’t need an agreement. These can be true.
Everyone swept you in the office at the back of the frustration about the cost of living and inflation. High on this directory was a housing. So what is the policy of this administration to tackle the lack of housing?
Regulations throughout the economy determine businesses to produce what they could to increase the offer. If you don’t have enough offer from something, if prices are too high, the best thing to do is just get out of the government and let businesses do more than that. And that is why Trump’s administration deals with the removal of the government.
The previous administration and some in Congress, on a bilateral basis, were trying to commit to policies led by the federal, for example, to give “carrots” to jurisdictions that decided to get rid of certain regulations and zones in a way that could not allow them to allow them to allow them. Is there something similar that comes from all of you in this spirit, or do you see this as a state and a local issue that is not about what you all do from the White House?
No, I see us being able to encourage states and locations to follow us on our agenda.
But I specifically ask through housing and belt.
It would be useful if other jurisdictions were followed.
He followed his example? Because this may be my ignorance, but I haven’t seen anything from this White House so far. It is granted, it is early.
No, you’re right. You are right. You are right that it is early and that we focus on commerce. We have focused on the tax bill.
Why Doge failed to achieve stated savings goals? Because there is a deficit from the Promised trillions.
Even the cutting of hundreds of billions is, I think, a huge achievement. I think Doge has done a fantastic job.
A big goal of this administration is to build reshore. We have seen a construction burst from about 2020 to 2024. Since the fall, it has fallen. Do we have to wait, as a success barometer for this administration, that construction construction is re -launched?
The construction construction I expect will grow as a result of our policies. And by the way, it’s not just trade and isolation, is it trade, tax and liberalization, right? And if you make the United States a much more competitive environment, providing further tax relief, by reducing the regulations that facilitate material building here, to make things here and you are starting to deal with asymmetries and trade through invoices and negotiations and other policies, then you do the United States.
Fixed -based investors in Asia and Europe have told me that they are planning to gradually rotate from US assets, including bonds. Do you think they are excessive? Or that market commentators covering these moves exaggerate its extent? And then, secondly, do you all welcome a weakening of demand for the dollar?
So, with the second, I have to direct you to my colleagues a few blocks down to the Treasury. As for the first, as I said before, it was really a historically excellent policy change and the fact that there was volatility of the financial market as a result should not be surprised.
But when the dust is installed, the capital will follow investment opportunities. Investment opportunities are a function of economic opportunities and therefore President Trump focuses on creating the most dynamic American economy in history.
The president said in an interview “Meet the Press”, “we lost hundreds of billions of dollars with China, now we are not actually working with China, so we save hundreds of billions of dollars. This is inaccurate, right?
So I don’t think the president was wrong. You know, America had a commercial deficit. And if the trade has come to decline, if trade with China has come to decline, then, you know that the section of the commercial deficit will be able to fall.
“We’re losing hundreds of billions of dollars with China. Now we don’t really deal with China,” we save hundreds of billions of dollars? Do you think it’s an accurate representation of how to talk about commercial deficits?
This is how the president understands it. And I think it’s right. I think the right of the president.
Congress is trying to make its way through a budget right now. I know you are not responsible for Congress, but the administration has talked about a commitment to reduce deficits and yet it also wants tax cuts and trillion defense budgets. So how is this added?
So a few things. One is that the highest growth will be revenue. And I think a lot of people are steadily underestimating this and is firmly wrong. There was no evidence that there was a long-term reduction in tax revenue as a result of TCJA-the President’s tax cuts. The growth of the economy is one of the best ways to increase revenue and this was the experience with the president’s first tax cuts.
How are invoices that are high enough to increase hundreds of billions of dollars in revenue according to the president’s promise to reduce the costs for businesses and consumers?
Because I do not believe that invoices will eventually increase the cost. I think that in the short term, volatility is possible, but in the long run, US consumers are flexible about where we import and if a country comes to a trade agreement with us, with which they open their purchases and allow us to export to our economy in the way we can export us to us.
But many experts in the load believe you are wrong. These supply chains need months, if not years, to move, and there will be no replacement, there will be simply higher costs.
Instead of buying things from China, we could buy things from another country. Or we can make things here. We can shift our demand at the border. This makes us more elastic.
It is true that we are early, and is it true that there can be instability in the short term, but we are talking a few weeks? Are we talking about a few quarters? Are we talking for a few years?
You have hit something that economists have never been able to settle. You know, the truth is that it is going to vary from product to product, right? And some products, it is probably relatively easy to change the suppliers. And other products may take years. And so, it is going to vary.
Do we have to understand from this administration and from you that the president is seriously serious about the rearrangement of the world shopping markets and that there will be no significant disconnection from this attitude?
The president was clear that there may be disorders. And he talked about the dolls – he talked about other things. I think it was in advance for it all the time.
I guess the concern about dolls – where the president said, instead of 30 maybe a young girl could only get, you know, a couple or three – is that people are even more worried, you know, critical inflows to US manufacturers. Forty percent of them use imported accessories or finished products.
The president said there may be disorders. And there are many negotiations that are now happening with nearly 20 different commercial partners. The president is one of the biggest, best negotiators in American history.
I have talked to many economists – many of whom I think you are friendly, as well as market participants, especially in the bond market – who believe that in order to receive this position you have resigned from your spiritual integrity and are willing to bend the events and bend it. How do you answer this view?
I think it’s ridiculous and I think it’s very common for people to promote their own political preferences to other people. You know, the administration focuses on creating a dynamic, healthy, strong economic explosion for Americans – and we will do so.
Thanks for reading! We’ll see you on Monday.
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