Former President Joe Biden's top economic adviser, Jared Bernstein, said he would advise President Donald Trump to publicly "declare victory" in the ongoing trade war, arguing that doing so could ease economic uncertainty and help the markets recover, The Hill reported.
"My advice to the president would be to go out there and declare victory — because that's what he does," Bernstein said Wednesday during an interview on "CNN News Central."
Bernstein said Trump should tell the American public, "I won the trade war. It's over." According to Bernstein, such a move could ease investor concerns and stimulate economic activity.
"Markets will recover. A lot of uncertainty would dissipate, and that would be a positive for the economy," Bernstein said. "I'd probably see some recession probabilities start to come down."
Despite his suggestions for calming the markets, Bernstein said current economic indicators point toward rising risks.
"I think every economist I've spoken to basically, who isn't paid to believe otherwise, believes that," Bernstein said, referring to the growing possibility of a recession.
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He attributed the economic downturn to what he described as unclear and conflicting signals from the Trump administration on trade policy. Bernstein said the lack of consistency has caused businesses to freeze expansion plans.
"I talked to people who say they planned on building a new warehouse to expand, but 'now I'm sitting on my hands,'" he said.
Bernstein acknowledged the potential for short-term recovery if the administration ends the trade war, but he cautioned that deeper economic harm may already be done.
"Some real long-term damage has been done" in the bond market, he said. "America's safe-haven status for global investors — that this is the safest, most risk-free place to invest — America's reputation as a reliable trading partner, those have been damaged, and that's not going to be corrected."
He added that rebuilding confidence in the U.S. economic and trade position will not be easy, noting that internal communication problems have exacerbated the issue.
"The uncertainty" and "contradictions" coming from the White House "won't be easy to fix," Bernstein said. "I'm afraid that they've done years of damage in less than three months in that regard."