Live

Watch CBSN Live

Paul Volcker calls out Trump on trade and taxes

How global trade has changed under Trump

Former Federal Reserve Chairman Paul Volcker says he's so concerned about the divisive messages coming from the White House that it's a relief to hear a conciliatory tone, even from overseas.

"It sounds terrible, but I respond more favorably to what the president of China is saying then the president of the United States," Volcker said. "The president of China, at least, says he's looking forward to a harmonious relationship over time," the 91-year-old Volcker told Ray Dalio, co-chief investor at Bridgewater, in an interview video released Tuesday. 

And the current White House? "We are all threats and demands," Volcker said.

In a bid to get China to purchase more U.S. goods, the White House has imposed tariffs on Chinese imports, with many scheduled to more than double on March 1 if trade discussions with Beijing don't lead to an agreement. 

Still, Volcker said some of what President Donald Trump is doing in terms of trade makes sense, given that prior administrations "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."

"Unevenness and repercussions"

As U.S. factories sent big chunks of their production to China and other nations with far lower labor costs, the loss of manufacturing jobs widened the economic gap. 

"There's no doubt we've had some unevenness and repercussions," Volcker said. "How can we develop an economy that's more balanced between the great middle part of the country and the two coastal areas?"

Widely viewed as orchestrating the end to high inflation in the 1970s and early 1980s, Volcker said the massive tax cut signed by Mr. Trump in 2017 are also indicative of political discord.

"Whatever you think about that tax bill," Volcker said, "it shouldn't have been rammed through Congress without any debate at midnight on Dec. 31."