Trump tariffs could trigger US recession

COLORADOBillionaire industrialist Charles Koch, who leads a powerful policy and political network, said on Sunday he worries President Donald Trump’s actions on trade and tariffs put the booming US economy at risk of recession.

While saying it’s impossible to know for sure because the president’s trade policy remains fluid, Koch said the greater the level of trade restrictions, the greater the risk of severe economic fallout.

“It depends on the degree,” he said in Colorado during a rare on-the-record meeting with reporters. “If it’s severe enough, it could.”

Koch said any protectionism at any level is very detrimental. “Every nation that’s prospered is one that didn’t engage in trade wars,” he said.

Trump has already imposed tariffs on steel and aluminium imports in the name of national security, as well as duties on certain Chinese products in response to allegations of intellectual property theft. That’s

drawn retaliatory tariffs on soybeans and other US goods in an escalating conflict, although Trump struck a truce with the European Union last week pending further negotiations.

The US economy in the second quarter expanded at its strongest pace since 2014, the government reported last Friday. But many economists see growth tailing off from here, and the potential for a trade war are part of their assessments.

Charles Koch, 82, and brother David Koch, 78, didn’t support Trump in the 2016 campaign, but the network they built has since praised his administration’s efforts to cut taxes and regulations. A White House spokesman didn’t immediately respond to an email seeking comment.

In June, the Koch network said it was planning a “multiyear, multi-million-dollar” campaign to promote free trade and oppose Trump’s moves to impose tariffs. The effort is to include advertising, voter mobilisation and lobbying.

Koch’s comments came as network donors are gathered for a three-day meeting at a luxury resort in Colorado Springs that ended yesterday. The network, with more than 700 donors who give at least US$100,000 (RM410,000) per year, has convened such gatherings twice annually since 2003.

So far this weekend, the network sought to downplay its role in this year’s midterm congressional campaign, even as ads it paid for have hammered Democrats in battleground states. Planned spending on campaign-associated activities was prominent when the network last assembled in January.

Since then, analysts and polling have increasingly suggested Democrats have a good chance of winning control of the US House in November’s midterm elections, in line with historical trends. The party needs a net gain of 23 seats to do that.

Speaking to reporters, Koch indicated a willingness to work with Democrats, so long as they embrace free-market solutions.

“I don’t care what initials are in front of after somebody’s name,” he said. “I would like there to be many more politicians who would embrace and have the courage to run on a platform like this.”

Koch also indicated he wants to have the network do a better job of holding Republicans accountable when they stray from what they’ve promised. The network is going to be “much stricter” in holding people it supports to their commitments, he said. — Bloomberg