CEDAR RAPIDS — There’s too much pessimism in farm country about the impact on commodity prices caused by differences with major trade partners, President Donald Trump’s economic policy adviser said Thursday.
“We’re crushing it,” Larry Kudlow said on a conference call with Midwest news reporters. “The USA is the hottest economy in the world.”
Kudlow delivered a “very rosy outlook” in a 15-minute call in which he highlighted second-quarter growth of 4.2 percent, first half growth of 3.1 percent and an estimate from the Atlanta Federal Reserve of 4.5 percent growth for the third quarter.
“It is an economic boom that virtually no one believed would be possible,” Kudlow said. “In large measure, that has come about because of major changes in economic policy from President Donald Trump and his administration.”
He downplayed concerns in Iowa and other farm states that tariffs and trade disputes with Canada, Mexico, China and other trade partners will be a drag on the economy.
“I think there is too much pessimism about that,” he said. “We are cooking on all cylinders” with growth in manufacturing and strength in the auto and steel industries as well as the service sector. Consumer spending remains strong, he added, “and more people are working at better wages.”
“Look, you can’t have a 4 percent economy, which is spread out across the country, that would take a hit just because China might put up a temporary tariff on a commodity,” Kudlow said. “It’s not going to bring it down. It’s just not.”
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Asked about the impact the trade disputes are having on farmers, Kudlow said, “We want all their soybean and wheat prices to go up, not down.”
And, he said, if they need it, farmers will get help from “government backstops” to weather trade disputes.
“The long story here is lower trade barriers, zero tariffs and so forth, which is the president’s goal,” Kudlow said. “That will increase growth because it will increase exports.”
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