Trump's ex-economic adviser warns tariffs 'backfiring' on US economy

Donald Trump’s ex-economic advisor Gary Cohn said on Wednesday that the trade war and the tariffs were backfiring and impacting on the US economy.

In an interview with the BBC, Cohn said the tariffs had a “dramatic impact” on US manufacturing and capital investment.

He said: "When you build plant equipment, you're buying steel, you're buying aluminium, you're buying imported products and then we put tariffs on those, so literally the tax incentive we gave you with one hand was taken away with the other hand.

"So we are not seeing the manufacturing job creation. And I think if we get through this tariff situation, there's a real opportunity to see it here in the United States."

Former president of Goldman Sachs bank, Cohn resigned from the Trump administration in March 2018 as the trade war started.

"I think the Chinese economy is driven by credit and credit availability," Mr Cohn told the BBC's Today programme. "Credit and credit availability is determined by the central government. And they can turn it on and they can turn credit off."

He also added that in the trade war everyone would lose, claiming that China’s economy was set for a slowdown regardless of the trade war.

Despite saying that the trade imbalances between both countries would be solved in the long term, he supported Trump’s fight to tackle China’s theft of US intellectual property and blocking US companies.