White House economic advisor Kevin Hassett speculated Monday that new tariff policies are not yet sparking widespread price inflation because President Donald Trump has convinced more people to buy American.
“There’s, I think, a lot of patriotism in the data,” Hassett said on CNBC’s “Squawk Box” when he was asked to explain why Trump’s protectionist policies have not stoked higher prices, despite warnings by many economists.
The National Economic Council director pointed to a recent White House report, which found prices of imported goods fell between December and May.
“My theory, as an economist, of why that is, is that Americans, because of President Trump’s leadership, have recognized that when they buy an American product, they not only get perhaps a better product, certainly a better product most of the time, but they’re also making their community stronger,” Hassett said.
“The bottom line is, people prefer American products,” he said.
“Therefore, the demand for imports has gone way down, so much that even with what tariffs have been there, where people would say, ‘Oh, they might increase prices at least a little bit,’ we’ve seen prices going down.”
Hassett also argued that countries with which the United States has trade deficits are eating the cost of the tariffs, instead of passing on higher prices to American consumers.
Trump’s tariffs are still expected to lead to higher prices this year.
And critics have noted that Trump has at least temporarily pulled back on some of his biggest tariff plans, including many announced during his “liberation day” in early April.
Others note that many importers stockpiled goods in anticipation of incoming tariffs, muting the near-term effects of the duties on prices.
Ernest Tedeschi, director of economics at the Budget Lab at Yale, wrote that the methodology used in the White House’s report “will understate tariff effects in their import indices.”
Tedeschi, who served as the top economist at the White House Council of Economic Advisers under former President Joe Biden, also cited data from Harvard University’s Pricing Lab showing that prices on imported goods have risen since early March, when U.S. tariffs on Canada, Mexico and China took effect.