Bloomberg Talks NEC Director Kevin Hassett Talks the Economy
Nov 19, 2025
Kevin Hassett, former Chair of the White House Council of Economic Advisers, shares his insights on critical economic issues. He dives into how tariffs are strategically designed to reduce domestic harm while influencing trade deficits. Hassett emphasizes the economic boost from onshoring, driven by tariffs, and discusses the role of AI in productivity growth. He challenges inflation expectations post-COVID, advocating for sustainable wage growth over stimulus checks. The conversation navigates through labor market dynamics and the importance of Fed independence.
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Tariffs Function Like A Border-Adjusted Tax
- Kevin Hassett argues tariffs acted like a border-adjusted business cash-flow tax that raised revenue without large inflation effects.
- He attributes muted U.S. inflation partly to importing countries cutting prices to preserve jobs rather than passing costs to U.S. consumers.
Onshoring And Capital Spending Surprise
- Hassett says tariffs spurred a large onshoring and capital spending boom benefiting U.S. workers.
- He views the resulting capital investment as a surprisingly strong channel offsetting expected inflationary effects.
History Misleads Without Accounting For Tech Change
- Hassett warns historical tariff studies mislead because today's tech and logistics make production shifts far easier than a century ago.
- He argues current onshoring and productivity gains change how tariffs affect prices and employment versus past episodes.