Former Economic Advisor Criticizes
Gary Cohn, former Chief Economic Advisor to U.S. President Trump and current Vice Chairman of IBM, recently stated in a media interview that the large-scale tariff measures implemented during Trump's administration are posing risks to the U.S. economy. He believes that while these policies aim to promote domestic manufacturing, they also increase operational burdens on businesses, potentially leading to job cuts as a consequence.
Cost Pressure Translates into Layoffs
Cohn pointed out that when facing increased costs due to tariffs, companies often find it challenging to completely offset this pressure by raising product prices. To maintain profit margins, many companies turn to cutting labor costs. While this approach may seem effective in the short term, it directly increases unemployment risks. In recent years, several U.S. tech giants have announced layoffs, with tens of thousands of employees losing their jobs since early 2025 alone.
White House at Odds with Market Views
The White House continues to emphasize the positive role of tariffs. Trump administration spokespersons have repeatedly stated that trade protection measures have brought investment back and led to job growth, revitalizing American manufacturing. However, market insiders and academia do not entirely agree. Cohn's warning reflects the business community’s concerns about the current operating environment: investments have increased, but the demand for labor has not significantly improved.
Employment Data Sends Warning Signals
According to the latest report from the U.S. Bureau of Labor Statistics, only 22,000 non-farm jobs were added in August, a sharp decline from previous months. Meanwhile, although the Federal Reserve has slightly lowered interest rates, the job market remains sluggish. Multiple central bank officials acknowledge that employment opportunities for young people and minorities are shrinking, intensifying job competition.
Post-Pandemic Labor Changes
Cohn particularly emphasized that the current situation is markedly different from the early COVID-19 pandemic period. At that time, companies, concerned about talent shortages, accelerated hiring and even hoarded labor. Now, however, when faced with economic uncertainty, companies choose to proactively control labor expenditure, leading to a gradual reduction in job positions. This shift adds extra pressure to the overall labor market.
Divergence Between Profits and Employment
Despite companies showing robust performance in their financial reports, with double-digit profit growth in the second quarter, Cohn warns not to be deceived by appearances. A divergence is emerging between profitability data and actual employment trends. In other words, company profits are increasing, but the conditions for ordinary workers are becoming increasingly difficult.
Risk Outlook and Future Direction
Cohn’s remarks highlight the contradiction between policy and market outcomes. He points out that tariffs inherently raise the cost of economic operations, and if continued for the long term, they may further suppress employment vitality. Analysts believe that future U.S. policy will continue to seek a balance between boosting manufacturing and maintaining employment, which is precisely the focal point of the debate between Trump’s team and critics.
