White House economist Kevin Hassett: Tariffs are hurting China much more than US

Kevin Hassett, chairman of the Council of Economic Advisers, said on Thursday that American businesses should look to alternative suppliers as U.S. tariffs on foreign goods continue to rise.

“If a tariff makes it so that you can’t buy something from China, then you can just buy it from some other country or from our own country,” Hassett said during Yahoo Finance’s All Market Summit event in New York. “There’s a lot of demand that’s sort of swinging around the world right now because of these tariffs.”

The U.S. tacked on an additional $200 billion in tariffs on Chinese imports earlier this week, catalyzing China to retaliate with announcements of intentions to impose tariffs on $60 billion of U.S. goods. The U.S. tariffs, which will take effect on Sept. 24, will begin at a rate of 10%, and could jump to 25% on Jan. 1.

Hassett added that the tit-for-tat, which has escalated since the summer, will continue to have a greater impact in China than in the U.S. Markets in the U.S. rallied Thursday as the S&P 500 and Dow both climbed to record highs despite ongoing trade tensions.

“The actions we’ve taken against China have had a big negative effect on their markets and their economy, but very little effect … here in the U.S,” Hassett said.

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White House Council of Economic Advisers Chairman Kevin Hassett
Trump economic adviser Kevin Hassett gestures as he speaks during a news briefing at the White House in Washington, U.S., September 10, 2018. REUTERS/Kevin Lamarque
U.S. President Donald Trump listens while Kevin Hassett, chairman of the Council of Economic Advisers, left, speaks on the South Lawn of the White House in Washington, D.C., U.S., on Friday, July 27, 2018. The U.S. economy accelerated to a 4.1 percent pace of growth in the second quarter, the fastest since 2014, letting Trump claim a win for his policies even though expansion is projected to cool. Photographer: Joshua Roberts/Bloomberg via Getty Images
White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. June 5, 2018. REUTERS/Carlos Barria
Senior advisor to the Hillary Clinton for President campaign, Gary Gensler, (L), and senior advisor to the John McCain for President campaign, Kevin Hassett, (R), during a discussion about economics and the presidential campaign at the New America Foundation in Washington January 23, 2008. REUTERS/Larry Downing (UNITED STATES) US PRESIDENTIAL ELECTION CAMPAIGN 2008 (USA)
White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. February 22, 2018. REUTERS/Jonathan Ernst
Kevin Hassett, Chair of the Council of Economic Advisers, speaks about the economy as US President Donald Trump (C) and Vice President Mike Pence (R) look on at the White House in Washington, DC, on July 27, 2018. - The US economy roared to life in the second quarter, posting the fastest annual growth rate in almost four years and the strongest among industrialized nations, according to government data released Friday. (Photo by NICHOLAS KAMM / AFP) (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
Kevin Hassett, Chair of the Council of Economic Advisers, and White House Press Secretary Sarah Huckabee Sanders attend the daily briefing at the White House in Washington, U.S., November 17, 2017. REUTERS/Carlos Barria
White House Council of Economic Advisers Chairman Kevin Hassett addresses reporters during the daily briefing at the White House in Washington, U.S. February 22, 2018. REUTERS/Jonathan Ernst
Kevin Hassett, Chairman of the Council of Economic Advisers, speaks during a briefing at the White House in Washington, DC, on September 10, 2018. (Photo by NICHOLAS KAMM / AFP) (Photo credit should read NICHOLAS KAMM/AFP/Getty Images)
Kevin Hassett, chairman of the Council of Economic Advisers (CEA), speaks during a discussion at the Institute of International Finance (IIF) policy summit in Washington, D.C., U.S., on Thursday, April 19, 2018. The event provides an opportunity to hear leading policy experts, financial industry leaders, and senior U.S. administration officials discuss economic policy priorities and potential implications for the U.S. and global economies. Photographer: Toya Sarno Jordan/Bloomberg via Getty Images
WASHINGTON, DC - SEPTEMBER 10: A reporter video records White House Council of Economic Advisers Chairman Kevin Hassett as he talks to reporters about the Trump Administration's economic policy during a news conference in the Brady Press Briefing Room at the White House September 10, 2018 in Washington, DC. Hassett said that it is not entirely accurate to credit the Obama Administration's economic policy for the growth since January 2017, when Trump took office. (Photo by Chip Somodevilla/Getty Images)
WASHINGTON, DC - SEPTEMBER 10: White House Council of Economic Advisers Chairman Kevin Hassett briefs reporters about the Trump Administration's economic policy during a news conference in the Brady Press Briefing Room at the White House September 10, 2018 in Washington, DC. Hassett said that it is not entirely accurate to credit the Obama Administration's economic policy for the growth since January 2017, when Trump took office. (Photo by Chip Somodevilla/Getty Images)
Kevin Hassett, chairman of the Council of Economic Advisers (CEA), speaks during a Joint Economic Committee hearing on the Economic Report of the President in Washington, D.C., U.S., on Wednesday, March 7, 2018. Hassett's name has circulating as a possible White House contender to succeed�Gary Cohn as President�Donald Trump's top economic adviser. Photographer: Zach Gibson/Bloomberg via Getty Images
WASHINGTON, DC, UNITED STATES - 2018/06/05: Press briefing with Kevin Hassett, Chair of the Council of Economic Advisers, in the White House Press Briefing room at the White House in Washington. (Photo by Michael Brochstein/SOPA Images/LightRocket via Getty Images)
Kevin Hassett, chairman of the Council of Economic Advisers (CEA), speaks during a Joint Economic Committee hearing on the Economic Report of the President in Washington, D.C., U.S., on Wednesday, March 7, 2018. Hassett's name has circulating as a possible White House contender to succeed�Gary Cohn as President�Donald Trump's top economic adviser. Photographer: Zach Gibson/Bloomberg via Getty Images
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But business owners and economists have largely expressed concern over the tariffs and their impact on costs of imports and loss of access to overseas markets. A Yahoo Finance survey of business operators conducted Sept. 18 found that 23% of those polled felt tariffs will have an “extremely negative” effect on their businesses, with an additional 13% expecting a “somewhat negative” impact.

Hassett conceded that U.S. agricultural suppliers have been among those targeted by China’s tariff retaliations, citing soybean and almond farmers in particular. “We’re aware that those short-run disruptions are what are the costs of pursuing this long-run reform,” Hassett said. The Trump administration announced over the summer $12 billion in emergency relief for farmers hit by the ongoing trade war.

The goal is for America’s major trade partners to open their markets and provide access “that’s just like the access we give them to ours,” Hassett said. “The basic principle that the president’s talked about all the way back to the campaign is that we need fair and reciprocal trade.”

But the administration is willing to crack down if compromises can’t be made, he added. Hassett called Sept. 30 a “hard deadline” for reaching an agreement with Canada over the North American Free Trade Agreement, echoing sentiments that House Majority Whip Steve Scalise made earlier in the week.

“We’re prepared to move ahead with Mexico by itself,” Hassett. “We have a great deal with Mexico – we love it, Mexico loves it.”

Emily McCormick is a reporter for Yahoo Finance.

More from the Yahoo Finance All Markets Summit:

Larry Fink: The market will be higher in 10 years

Larry Fink: The new trade deals will be good, but will potentially come at a great cost

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