Why Paul Volcker Is Unhappy with Trump’s Tax and Trade Policies



Paul Volcker unhappy with tax reform

Speaking to the founder of Bridgewater Associates, Ray Dalio, former Federal Reserve Chairman Paul Volcker took Trump and other US lawmakers to task. A podcast interview was released today in which Volcker showed his unhappiness about tax reform. As Reuters reported, he said, “We rammed through a massive tax bill. Whatever you think about that tax bill, it shouldn’t have been rammed through Congress without any debates at midnight on Dec. 31.” He worries about an increasing lack of faith in the government.

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Volcker on trade

Volcker also commented on the “trade war.” He’s concerned that trade negotiations with China threaten the United States’ future over the next ten years. He said, “It sounds terrible but I respond more favorably to what the president of China is saying than the president of the United States.”

Volcker acknowledged that there’s some justification to what Trump’s doing. He said, “It is true during our period of leadership we tended to overlook in our own country some of the problems that world leadership implied in terms of willingness to accept a lot of imports, in particular.”

US-China trade negotiations

The United States (SPY) and China (FXI) are currently undergoing negotiations to resolve differences and reach a trade deal by March 1. If both sides aren’t able to reach a deal, tariffs on $200 billion worth of Chinese imports would increase to 25% from 10%, which would be a big dampener for the markets (IVV). Among other companies, Apple (AAPL), NVIDIA (NVDA), and Caterpillar (CAT) have warned that China’s slowdown is hurting their prospects. However, US equity markets (DIA)(QQQ) have been strong this year after the sell-off in the fourth quarter.


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