One week after voters punished Republicans over rising prices in the midterm elections , President Donald Trump's White House signaled it would stay the course on tariffs , even as his former top economic advisor warned that Americans are footing the bill.
Jim Goyer, Trump's director of White House Office of Public Liaison, defended tariffs as a tool to rebuild U.S. manufacturing, secure supply chains and protect national security during an address Tuesday at the B20 summit , a gathering of global business leaders in Washington hosted by the U.S. Chamber of Commerce.
"And we are just getting started," Goyer said. "Our ambition is to continue this pace for the remainder of the president's term in office."
But Gary Cohn , who served as Trump's chief economic advisor during his first administration, offered a sharply different assessment during an onstage interview later Tuesday.
"Tariffs are a consumption tax on the U.S. consumer," Cohn said, arguing that the duties are raising prices and forcing Americans to reconsider purchases.
The divide exposed a growing dilemma for Trump. His trade agenda is reshaping global commerce – and driving up costs for voters. Companies are adapting to the chaos, but the old trading system isn't coming back.
"President Trump has disrupted that system in a way that we're not likely to return to," Kevin Brady, a former Republican congressman who helped lead the B20 summit, said during a discussion with U.S. Chamber CEO Suzanne Clark.
The political backlash was evident in the Nov. 3 election. Roughly two-thirds of voters said Trump's policies contributed to inflation, according to the CNBC Voter Poll. Nearly nine in 10 said the cost of living was a major or crucial factor in their vote.
A separate Reuters/Ipsos poll released Tuesday found 62% of Americans supported repealing Trump's tariffs, while just 21% approved of his handling of the cost of living.
"Last week, American voters sent a clear message about the cost of living and their economic security," Clark said in her keynote address.
The pressure intensified Tuesday as new government data showed consumer prices rose 0.4% in October , exceeding economists' expectations. Annual inflation reached 3.7% in September, the latest available year-over-year figure and well above the Federal Reserve's 2% target.
Tariffs are not the only factor driving higher prices. The war with Iran has pushed energy costs sharply higher, while housing, healthcare and other household expenses continue to strain consumers.
But research has found Trump's import duties have added to those pressures. A Federal Reserve Bank of New York study estimated that about 26% of tariff increases were passed through to consumer prices, with some effects taking nine to 12 months to work through supply chains.
Cohn, now vice chairman of IBM , argued that while tariffs generate revenue for the U.S., those gains come at consumers' expense.
"You're looking at one side of the equation. You're looking at the credit side of the balance sheet," Cohn said, describing how he would respond to Trump's defense of tariff revenue. "There's the debit side of the balance sheet, which is every hardworking American who happened to pay the tariff through some product that they bought."
Still, Cohn saw room for a bipartisan trade deal. He suggested Trump and the incoming Democratic Congress could make protections against China and unfair trade practices permanent while rolling back tariffs on Canada , leaving less for future presidents to undo.
For businesses, the shift is already underway. UPS CEO Carol Tomé said customers are moving production and sourcing closer to home as global supply chains become more regional.
"Supply chains are diversifying. Supply chains are regionalizing," Tomé said during a panel discussion moderated by CNBC's Morgan Brennan .
Separately, UPS is opening a new $80 million-plus air hub in the Philippines in October to expand its Asian network and improve connections across more than 1,100 global trade lanes.
Other executives, like Jim Fitterling , executive chairman of chemicals giant Dow , defended Trump's tariffs despite their costs. Fitterling acknowledged they can drive up prices but argued they are necessary to combat unfair competition and protect U.S. manufacturing.
Democrats plan to challenge Trump's tariffs when they take control of Congress in January, but his veto power and broad trade authority could make them difficult to overturn.
