President Donald Trump's former economic adviser Gary Cohn warned that a trade war with US allies could wipe out the benefits of the tax cuts Trump worked to pass.
"If you end up with a tariff battle, you will end up with price inflation, you could end up with consumer debt," Cohn said during an interview Thursday with Washington Post Live. "Those are all historic ingredients for an economic slowdown. So I would not like to see that happen."
Asked if a trade war could erase the benefits of the tax reform bill passed last December, Cohn said, "Yes, it could."
After a little over a year on the job, Cohn stepped down as director of the White House's National Economic Council in March after helping to get Trump's tax bill passed.
Cohn's comment came amid escalating tensions between the US and its allies Canada, Mexico and the European Union over steel and aluminum.
Trump also announced Friday that the United States will impose a 25% tariff on $50 billion of Chinese exports.
"There's a lot of friction in the trading system right now," Cohn said Thursday. "But ultimately, I think the goal that the United States wants is clear and I think it is the right, ultimate goal."
He argued that all countries should lower their trade barriers and enforce laws to prevent intellectual property theft.
Cohn added later, "I don't know how this totally works out in the end. We need to trade with each other."