Odd Lots Podcast Summary
Episode: Trump Economic Advisor, Stephen Myron, on Tariffs and Tax Cuts
Release Date: June 13, 2025
Hosts: Jill Weisenthal and Tracy Alloway
Guest: Stephen Myron, Chair of the Council of Economic Advisors at the White House

Introduction

In this episode of Bloomberg's Odd Lots, hosts Jill Weisenthal and Tracy Alloway engage with Stephen Myron, the Chair of the Council of Economic Advisors at the White House. The discussion centers around the Trump administration's economic policies, particularly tariffs and tax cuts, and their impacts on the U.S. economy.

Inflation and Consumer Price Index (CPI)

The conversation begins with the recent CPI report, which came in softer than expected, surprising many economists.

• Stephen Myron (03:18):
  “In all four months since the president was inaugurated, inflation, CPI, surprised to the downside. And I think that was very much in contrast to lots of people's expectations.”

Myron emphasizes that despite initial concerns over tariffs potentially increasing inflation, the actual CPI figures have been lower than anticipated, indicating controlled inflation rates.

Labor Market and Economic Growth

The hosts probe into the robustness of the U.S. economy, focusing on labor market momentum and overall economic growth.

• Stephen Myron (03:18):
  “The underlying economy has been pretty healthy... underlying private sector final domestic demand... was high twos, almost 3%.”

Myron points out that despite a slight dip in first-quarter GDP, underlying economic indicators remain strong, with projected GDP growth for the second quarter around 3% to nearly 4%.

Immigration Policies and Employment

Tracy Alloway raises concerns about the intersection of immigration policies and employment rates, particularly regarding worker shortages and wage impacts.

• Stephen Myron (05:13):
  “These are the folks who we have to protect because there's so much evidence... the conditions of the labor market when you get your first job, affect your career for decades to come.”

Myron explains that while stringent immigration policies have kept unemployment rates low, they have also created slack in specific labor market segments, notably among young workers (16-24 years old). He stresses the importance of integrating these young workers into the workforce to secure their long-term economic prospects.

Tariffs and Trade Policy

A significant portion of the discussion delves into the rationale, implementation, and effectiveness of tariffs imposed by the Trump administration.

• Jill Weisenthal (10:39):
  “Sometimes it's about bringing in revenue, national security, jobs... What are the benchmarks that we should use to see if these tariffs achieved their goals?”

• Stephen Myron (10:39):
  “There’s not just one set of tariffs... But thematically, addressing trade deficits and national security are primary drivers.”

Myron outlines the various categories of tariffs, including 301s, 232s, and IPA tariffs, each serving different statutory purposes like national security or correcting trade imbalances. He emphasizes that addressing trade deficits is crucial for reducing economic vulnerabilities and promoting balanced trade.

Effectiveness of Tariffs

• Stephen Myron (40:53):
  “Everybody in this administration loves tariffs... they have persuaded our trading partners to enter negotiations about dropping trade barriers they never, ever would have entertained without them.”

Myron asserts that tariffs have been an effective tool in initiating trade negotiations and correcting unfair trade practices, particularly noting minimal retaliation except from China, which he views as a success in enforcing U.S. trade policies.

The Big Beautiful Bill and Tax Cuts

The hosts explore the administration's major legislative effort, often referred to as the "Big Beautiful Bill," focusing on its implications for tax policy and economic growth.

• Tracy Alloway (22:43):
  “Section 899, which would tax foreign holders of US bonds... Is it a revenue generator or a step towards revamping the US dollar's role globally?”

• Stephen Myron (23:40):
  “899 is about preventing American tax sovereignty from being exported and addressing digital services taxes that unfairly target American companies.”

Myron explains that Section 899 aims to counteract OECD's global minimum tax and combat digital services taxes that disproportionately affect U.S. companies. He emphasizes that maintaining low tax rates is essential for economic growth and competitiveness.

Economic Growth as a Deficit Solution

• Stephen Myron (30:06):
  “Low taxes are conducive to a dynamic, efficient economy. Supply-side policies push out the supply side, bringing down price pressures and reducing inflation.”

Myron argues that the administration's supply-side economic policies, including tax cuts and deregulation, are designed to spur economic growth, which in turn will generate additional revenue to offset deficits. He highlights the expectation of 3% growth, contributing an additional $4 trillion over a decade.

National Security and Manufacturing

The discussion moves to the importance of maintaining a robust manufacturing sector for national security.

• Jill Weisenthel (19:22):
  “How does the administration incentivize advanced manufacturing while addressing national security needs?”

• Stephen Myron (19:22):
  “Sustainability in industrial policy is key. Creating a pro-business environment through deregulation and tax incentives encourages sustainable manufacturing growth without relying on perpetual subsidies.”

Myron critiques the previous administration's reliance on government subsidies for industrial policy, advocating instead for a pro-business environment that fosters sustainable growth through tax incentives and deregulation.

Debt and Deficit Management

The episode addresses concerns regarding the national debt and the administration's approach to managing deficits.

• Jill Weisenthel (29:16):
  “Why is it crucial to extend the 2017 tax cuts despite the growing national debt?”

• Stephen Myron (30:06):
  “High tax rates are detrimental to economic growth and competitiveness. Maintaining low taxes fosters a dynamic economy, essential for sustainable deficit reduction.”

Myron emphasizes the importance of maintaining low tax rates to support economic growth, which he believes will generate sufficient revenue to manage and reduce deficits over time. He also discusses the limitations of the Congressional Budget Office (CBO) scores in capturing the full fiscal impact of the administration's policies.

Section 899 and Global Financial Strategy

The conversation delves deeper into the specifics of Section 899, its strategic goals, and its impact on global financial relations.

• Stephen Myron (23:40):
  “899 serves as a disincentive to unfair foreign tax policies targeting American companies. It aims to preserve U.S. tax sovereignty and ensure fair competition in the global market.”

Myron clarifies that Section 899 does not significantly impact portfolio flows like U.S. Treasury bonds but is primarily targeted at corporate profits and addressing unfair taxation of American companies abroad.

Strategic Goals and Future Outlook

As the episode wraps up, the hosts inquire about future trade deals and the administration's strategies to mitigate economic uncertainties.

• Stephen Myron (34:18):
  “We’re optimistic about upcoming trade deals and the passage of the tax bill within the next month, which should begin to resolve current uncertainties.”

Myron expresses optimism that the administration will successfully negotiate trade deals by the upcoming July 9 deadline and pass the Big Beautiful Bill, which he believes will stabilize and grow the economy despite existing uncertainties.

Closing Remarks

The episode concludes with the hosts reflecting on the insights shared by Myron, particularly the emphasis on economic growth as the cornerstone for addressing deficits and fostering a resilient, competitive economy.

Notable Quotes:

• Stephen Myron (05:13):
  “These are the folks who we have to protect because there's so much evidence in the labor economics literature that the initial conditions when you graduate, the conditions of the labor market when you get your first job, affect your career for decades to come.”

• Stephen Myron (10:39):
  “There’s not just one set of tariffs... They address trade deficits and national security, creating more balanced and sustainable trade.”

• Stephen Myron (19:22):
  “Sustainability in industrial policy is key. Creating a pro-business environment through deregulation and tax incentives encourages sustainable manufacturing growth without relying on perpetual subsidies.”

• Stephen Myron (30:06):
  “Low taxes are conducive to a dynamic, efficient economy. Supply-side policies push out the supply side, bringing down price pressures and reducing inflation.”

Conclusion This episode of Odd Lots provides an in-depth analysis of the Trump administration's economic strategies, particularly focusing on the use of tariffs and tax cuts to stimulate growth and address trade imbalances. Stephen Myron offers a perspective that underscores the importance of maintaining low tax rates, fostering sustainable manufacturing, and leveraging economic growth to manage national deficits. The discussion highlights the administration's commitment to supply-side economics as a pathway to a resilient and competitive U.S. economy.

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