Elon Musk, Trump allies say tariff plans could cause economic pain
Tesla and SpaceX CEO Elon Musk speaks at a rally for former US President and Republican presidential candidate Donald Trump at Madison Square Garden in New York, October 27, 2024.
Angela Weiss | Afp | Getty Images
Former President Donald Trump’s top allies and surrogates, like Tesla CEO Elon Musk appear to accept that the Republican presidential nominee’s policy plans could trigger a short-term economic thunderstorm.
But they contend it will be worth the sunnier long-term outlook.
On Tuesday, Musk replied in agreement to a social media post, whose author claimed that the former president’s policy proposals could spark a “severe overreaction in the economy” that would mean “markets will tumble” before getting back to a “sounder footing.”
“Sounds about right,” Musk, one of Trump’s most high-profile billionaire backers, responded on X.
Musk is not the only Trump surrogate who has acknowledged that the former president’s economic platform — a cocktail of steep tax cuts and universal tariffs on imports — if enacted, would have the immediate effect of making tens of thousands of products more expensive to consumers.
Last week, Cantor Fitzgerald CEO Howard Lutnick, a co-chair of the Trump-Vance 2025 transition team, also recognized that imposing the kind of tariffs Trump pledges to put on foreign goods would have the immediate impact of raising consumer prices on imports.
“Correct: If I raise the tariff on just this particular idiosyncratic product, yes, right, it will be more expensive,” Lutnick said in a Thursday interview on CNBC’s “Squawk Box,” responding to a question about whether universal tariffs would effectively become a short-term sales tax.
Lutnick said that higher prices on imports would serve to steer consumers towards buying domestic alternatives, but he noted that strategy would fail for products that the U.S. does not produce.
“If we don’t make that particular product, that [price] will go up,” he said.
Trump’s running mate, Ohio Sen. JD Vance, has also nodded to the potential consumer pain of Trump’s vision for across-the-board tariffs, though he hedged that it would be worth the possible benefits.
“Anything that you lose on the tariff from the perspective of the consumer, you gain in higher wages, so you’re ultimately much better off,” Vance said in an August interview on NBC’s “Meet the Press.”
Howard Lutnick, Chairman and CEO of Cantor Fitzgerald gestures as he speaks during a rally for Republican presidential nominee and former U.S. President Donald Trump at Madison Square Garden, in New York, U.S., October 27, 2024.
Andrew Kelly | Reuters
Dozens of independent economists, Wall Street analysts and researchers have warned that Trump’s second-term proposals would threaten to swell the federal deficit and reheat consumer prices.
Vice President Kamala Harris has capitalized on that criticism, branding Trump’s tariff proposal, and the potential ensuing price hikes the “Trump sales tax.”
But the recent comments from people like Musk and Lutnick also point to an emerging tactic Trump allies are using to deflect those attacks: Accept some immediate pain for eventual gains.
In response to CNBC’s request for comment on the Trump surrogates’ recent remarks, the Trump campaign rejected the notion that his policy proposals would bring short-term pain, and zd instead punted the possibility of economic danger onto their Democratic opponent.
“The only pain facing Americans would be four more years of Kamala’s failed economic policies,” Trump campaign senior advisor Brian Hughes told CNBC in a statement.
Republican National Committee spokesperson Anna Kelly echoed Hughes in another statement: “Harris can’t keep her story straight, but the truth is the same: Harris has always opposed tariffs because she can’t be trusted to put workers first.”
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