White House trade adviser Peter Navarro hopped on the defense of President Donald Trump amid the release of new inflation data.
The Bureau of Labor Statistics announced on Thursday that wholesale prices rose at their fastest pace in three years in July. The producer price index, which measures the final demand of goods, jumped 0.9%, signaling that inflation might be picking back as businesses contend with costs tied to Trump’s sweeping tariffs. The Dow Jones previously estimated a 0.2% gain.
During an appearance on CNBC’s “Money Movers,” Navarro asked whether tariffs should be seen as price hikes or tax cuts, to which he responded, “I say they’re tax cuts.”
Anchor Sara Eisen then swooped in: “Many economists would say they’re tax hikes, because ultimately, a consumer will pay for some of those increased prices.”
Navarro said that a “debate” has been “going on since the first term, adding that “Most economists just don’t agree with us.”
“The problem with most economists is they got it wrong the first time around. Just spectacularly wrong,” Navarro said. “So, who has credibility here? The Trump administration or ‘the economists? I mean, come on.’”
Navarro was pointing to predictions of a recession during Trump’s first term. The National Bureau of Economic Research, the official economic arbiter, announced in June 2020 that the United States had entered a two-month recession, largely caused by the COVID pandemic, which appears to be the shortest on record.
While Trump has pledged that tariffs will boost domestic manufacturing and prevent other countries from “ripping off” the United States, most economists have argued that the tax is ultimately paid by companies that import goods. They then have the option to either absorb the costs or pass them along to consumers.
Major brands like Procter & Gamble and Hershey have warned that tariffs could drive up prices on everyday household items and snacks. The Yale Budget Lab, a nonpartisan policy research center, announced earlier this month that Trump’s new tariff rates — most which took effect starting Aug. 7 — will cost the average family about $2,400 this year.
Meanwhile, other companies, including Ford, have said their profit for this year is expected to fall.
Eisen said she has given the Trump administration “plenty of credit,” noting that inflation has not been as “bad.” While wholesale prices reached above expectations, the pace of consumer inflation remained steady in July, the BLS reported on Tuesday.
The reports come as Trump fired Erika McEntarfer as the head of the agency, following a weak jobs report released earlier this month that the president claimed was “rigged.” It found that hiring had slowed in July and was much weaker in May and June than initially recorded.
On Monday, Trump said he would nominate economist E. J. Antoni, a longtime critic of the bureau, as commissioner. Antoni has since faced scrutiny after he suggested the agency suspend its monthly jobs report in an interview with Fox News Digital earlier this month.
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