Alan Greenspan, former chairman of the U.S. Federal Reserve and president and founder of Greenspan Associates, speaks during a Bloomberg Television interview in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Greenspan Calls Trump Tariff Policies ‘Insane’

(Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan called President Donald Trump’s tariff policies “insane” and said “why we’re doing it probably is very deep in the psyche of somebody.”

Responding to a question about China at an event at New York University on Wednesday, he said both sides lose out in such a clash.

“There are victors and there are losers in a tariff fight,” Greenspan said. “But that doesn’t say that a more important issue is both are losing, it’s just the winner loses less.”

Greenspan Calls Trump Tariff Policies ‘Insane’

“It’s an excise tax, and people think of tariffs other than what it is,” he added. “It’s a tax, and everybody engaged in warfare of this type, it would mean that you’re withdrawing credit or purchasing power from a whole series of countries.”

Greenspan said the notion that China would outrace the U.S. in all economic respects “is a mistake,” pointing to their lower gross domestic product per capita.

The U.S. and China have levied several rounds of tariffs on each others’ goods, and tariffs on $200 billion of Chinese imports are due to rise to 25 percent in January in the absence of a breakthrough in negotiations.

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