Media personality Larry Kudlow, a loquacious and energetic advocate of low taxes and free trade, has emerged as a leading candidate to replace Gary Cohn as director of the White House’s National Economic Council
.. Kudlow was an adviser to Trump during the 2016 campaign, working closely with Treasury Secretary Steven Mnuchin on the design of an initial tax plan. But Kudlow, in media appearances in the past month, has been critical of President Trump’s new plan to impose tariffs on steel and aluminum imports
.. Trump’s close relationship with Kudlow — and Kudlow’s experience speaking on television — have bolstered his candidacy for the job.
.. On March 3, Kudlow joined Steve Moore and Arthur Laffer in a column for CNBC.com that was sharply critical of Trump’s proposal to impose the new tariffs.
“Trump should also examine the historical record on tariffs, because they have almost never worked as intended and almost always deliver an unhappy ending,” they wrote.
.. It is unclear if Trump wants his next NEC director to advance an ambitious agenda or spend more time with the media defending the changes that have already taken place, such as tax cuts and efforts to roll back regulations.
The decision to tax steel and aluminum imports was a political move that should, in theory, play well in races such as Pennsylvania’s district 18 special elections. The larger question, however, is whether the US wants to compete in the industrial commodities businesses that had peaked decades ago. Boosting these industries will be at the expense of value-added manufacturing, which has rebounded in recent years. Even China is now shifting out of these “old economy” sectors (#2 here). Ironically, higher import prices for industrial materials may encourage some firms to move more production outside of the US.
From the consumer’s perspective, these tariffs mean higher prices on thousands of products – from US-made cars to beer cans.