Treasury Secretary Janet Yellen warns “sweeping, untargeted tariffs” would reaccelerate inflation

Treasury Secretary Janet Yellen will warn in a Thursday speech that the type of tariffs planned by former President Donald Trump, if he were to retake the White House, would reignite inflation and harm the economy. 

The remarks from Yellen, which she will deliver when she speaks at 3 p.m. ET today at the Council on Foreign Relations in New York, will take aim at the potential economic impact of Trump’s proposals for 10% across-the-board levies on all products imported into the U.S. from overseas, as well as tariffs of 60% or more on imports from China. 

While Yellen didn’t specifically name Trump, she described the dangers of “sweeping, untargeted tariffs” in excerpts of the speech released early Thursday by the Treasury Department. Economists are largely in agreement that Trump’s broad-based tariffs would prove to be inflationary, given they would be paid by U.S. consumers — not foreign governments, as Trump has claimed — through higher prices on everything from food to cars. 

“Calls for walling America off with high tariffs on friends and competitors alike, or by treating even our closest allies as transactional partners are deeply misguided,” Yellen will say in the speech, according to the excerpts provided to CBS MoneyWatch. “Sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive.”

Trump, meanwhile, has been promoting his tariff plan while campaigning ahead of the November 5 presidential election. On October 15, Trump told Bloomberg editor-in-chief John Micklethwait at an Economic Club of Chicago event that tariff is “the most beautiful word in the dictionary.”

“The tariffs are two, two things, if you look at it? No. 1 is the protection of the companies that we have here and the new companies that will move in because we’re going to have thousands of companies coming into this country,” Trump said at the event. “We’re going to grow it like it’s never grown before.”

But economists note that Trump’s plan could add costs of an estimated $1,700 a year to the typical middle-class household. And some U.S. businesses that manufacture domestically, such as automakers, import parts from overseas, which means they would also see an increase in costs and would also likely need to boost prices. 

In her speech, Yellen will underscore how the Biden-Harris administration has stabilized the economy after the chaos created by the pandemic, as well as strengthened relationships with other nations, which she depicts as vital to U.S. economic growth. 

“We’ve focused on stabilizing and strengthening relationships and working multilaterally, including because we believe that America’s economic well-being depends on a global economy that’s growing and secure,” Yellen will say. “We need to promote policies, investments and institutions that support global growth, protect financial stability and avoid economic instability.”