The Republican presidential nominee, former U.S. President Donald Trump, on Tuesday, Oct. 15, spoke to the Economic Club of Chicago. In this photo, he speaks to attendees during a campaign rally at the Mosack Group warehouse on Sept. 25 in Mint Hill, North Carolina. (Photo by Brandon Bell/Getty Images)

Republican presidential nominee Donald Trump defended his plans for steep tariffs on Tuesday, arguing economists who say that those higher costs would get passed onto consumers are incorrect and that his proposals would benefit American manufacturing.

During an argumentative hour-long interview with Bloomberg Editor-in-Chief John Micklethwait hosted by the Economic Club of Chicago, Trump vehemently denied tariffs on certain imported goods would lead to further spikes in inflation and sour America’s relationship with allies, including those in Europe.

“The higher the tariff, the more likely it is that the company will come into the United States, and build a factory in the United States so it doesn’t have to pay the tariff,” Trump said.

Micklethwait questioned Trump about what would happen to consumer prices during the months or even years it would take companies to build factories in the United States and hire workers.

Trump responded that he could make tariffs “so high, so horrible, so obnoxious that they’ll come right away.” Earlier during the interview, Trump mentioned placing tariffs on foreign-made products as high as 100% or 200%.

Harris-Walz 2024 spokesperson Joseph Costello wrote in a statement released following the interview that “Trump showed exactly why Americans can’t afford a second Trump presidency.”

“An angry, rambling Donald Trump couldn’t focus, had to be repeatedly reminded of the topic at hand, and whenever he did stake out a position, it was so extreme that no Americans would want it,” Costello wrote. “This was yet another reminder that a second Trump term is a risk Americans simply cannot take.”

Smoot-Hawley memories

Micklethwait noted during the interview that 40 million jobs and 27% of gross domestic product within the United States rely on trade, questioning how tariffs on those products would help the economy.

He also asked Trump if his plans for tariffs could lead the country down a similar path to the one that followed the Smoot-Hawley tariff law becoming law in June 1930. Signed by President Herbert Hoover, some historians and economists have linked the law to the beginning of the Great Depression.

Trump disagreed with Micklethwait, though he didn’t detail why his proposals to increase tariffs on goods from adversarial nations as well as U.S. allies wouldn’t begin a trade war.

The U.S. Senate’s official explainer on the Smoot-Hawley tariffs describes the law as being “among the most catastrophic acts in congressional history.” And the Congressional Research Services notes in a report on U.S. tariff policy that it was the last time lawmakers set tariff rates.

Desmond Lachman, senior fellow at the American Enterprise Institute, a conservative-leaning think tank, wrote last month that Trump’s proposal to implement tariffs of at least 60% on goods imported from China as well as 10 to 20% on all other imports could have severe economic consequences.

“It is difficult to see how such a unilateral trade policy in flagrant violation of World Trade Organization rules would not lead to retaliation by our trade partners with import tariff increases of their own,” Lachman wrote. “As in the 1930s, that could lead us down the destructive path of beggar-my-neighbor trade policies that could cause major disruption to the international trade system. Such an occurrence would be particularly harmful to our export industries and would heighten the chances of both a US and worldwide economic recession.”

CRS notes in its reports that while the Constitution grants Congress the authority to establish tariffs, lawmakers have given the president some authority over it as well.

The United States’ membership in the World Trade Organization and various other trade agreements also have “tariff-related commitments,” according to CRS.

“For more than 80 years, Congress has delegated extensive tariff-setting authority to the President,” the CRS report states. “This delegation insulated Congress from domestic pressures and led to an overall decline in global tariff rates. However, it has meant that the U.S. pursuit of a low-tariff, rules-based global trading system has been the product of executive discretion. While Congress has set negotiating goals, it has relied on Presidential leadership to achieve those goals.”

The presidency and the Fed

Trump said during the interview that he believes the president should have more input into whether the Federal Reserve raises or lowers interest rates, though he didn’t answer a question about keeping Jerome Powell as the chairman through the end of his term.

“I think I have the right to say I think he should go up or down a little bit,” Trump said. “I don’t think I should be allowed to order it. But I think I have the right to put in comments as to whether or not interest rates should go up or down.”

Trump declined to answer a question about whether he’s spoken with Russian leader Vladimir Putin since leaving office.

“I don’t comment on that,” Trump said. “But I will tell you that if I did, it’s a smart thing. If I’m friendly with people, if I have a relationship with people, that’s a good thing, not a bad thing.”

Journalist Bob Woodward wrote in his new book “War” that Trump and Putin have spoken at least seven times and that Trump secretly sent Putin COVID-19 tests during the pandemic, which the Kremlin later confirmed, according to several news reports.

Trump said the presidential race will likely come down to Pennsylvania, Michigan and possibly Arizona.

The Economic Club of Chicago has also invited Democratic presidential nominee Kamala Harris for a sit-down interview.

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