The Trump administration's emphasis on tariffs and investment, rather than consumer-driven demand, has helped power the latest strong GDP numbers while keeping inflation in check, Dick Morris, an adviser to President Donald Trump, told Newsmax on Saturday.
"What he's done is instead of using consumer demand to hype this stuff, which can get out of hand and become a boom, instead, he's hyped investment and tariffs and making businesses come back to the United States," Morris told "The Count."
Morris said past Federal Reserve leaders viewed it as the Fed's job to cool the economy when growth accelerated, but he said Trump has taken a different approach by keeping conditions supportive for expansion.
Further, Morris said, tariffs matter beyond revenue because they pressure companies to shift production to the U.S., which can boost growth without spiking demand and affecting "not just income, but the incentive for companies to come to the United States instead of relying on a consumer-demand economy."
"Instead, you rely on the supply side," he added. "You get companies here, you get companies to switch their manufacturing here because their tariffs if you don't and that incentivizes production, incentivizes growth without hyping consumer demand."
He also pointed to energy prices as a major factor in overall economic performance, calling oil and gas "cost drivers" that ripple through prices across the economy.
"When the cost of oil increases, the cost of everything gets pushed up, and by increasing supply the way he has, it's amazing that he's been able to bring this down," said Morris.
Still, he added, "to do both, to have an economic surge and reduced oil prices is quite a trick."
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