Even Trump's top economic adviser admits Trump's trade war could hurt the US economy

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Larry Kudlow, the top economic adviser to President Donald Trump

• Larry Kudlow, President Donald Trump's top economic adviser, was asked whether the president's tariffs could "jeopardize" the strong US economic growth.
• "Oh, it might, I don't deny that," Kudlow responded, but said the trade actions hadn't hurt the economy yet.
• Stephen Moore, another economist who has advised Trump, also said the tariffs were "problematic."
• Most economists expect the tariffs to be a modest drag on economic growth.

Economists, trade experts, and investors are all worried that President Donald Trump's recent tariffs could be a problem for the US economy. Even top advisers in the Trump administration are admitting the same.

Larry Kudlow, the president's top economic adviser, told host Chris Wallace on "Fox News Sunday" that the tariffs could undermine the economy's steady growth.

During the interview, Wallace highlighted the strength of Friday's jobs report and asked if Trump's tariffs on steel, aluminum, and Chinese goods could "jeopardize" the progress of the labor market and economy.

"Oh, it might, I don't deny that," Kudlow said. "You have to keep an eye on it."

When pressed on the possibility that the tariffs could end up hurting the US, Kudlow hedged and said no harm has befallen the economy quite yet.

"It's possible, absolutely," he said. "I don't think it has right now."

Trump announced Thursday that the US would impose tariffs on imports of steel and aluminum from three key US allies: Canada, Mexico, and the European Union. The move immediately sparked retaliation from those partners and raised the possibility of a sustained trade war.

Kudlow isn't the only pro-Trump economist to raise concerns about the tariffs. Stephen Moore, an economic adviser to Trump during the 2016 campaign, also suggested the tariffs pose an economic risk.

"I do agree that this is a risk to the economy, tariffs are taxes, they will hurt American consumers, the US Chamber of Commerce says this could cost American jobs," Moore said in an interview with CNN, adding that the trade tensions are "problematic."

Most economists estimate that the tariffs will cause a net loss in US jobs since more people are employed in industries that rely on steel and aluminum than are employed in the metals industries. By pushing up the price of the metals, companies that use steel and aluminum in their finished products will likely cut costs in other areas, including labor.

Beyond the labor market, most forecasters project the tariffs will prompt an increase in the cost of goods, a modest drag on business investment, and a slowdown US economic growth. Stephen Gallagher, chief US economist Societe Generale, said the real risk lies in the possibility of escalation.

"Even considering the $50 billion of tariffs on China currently under consideration by the USTR, the known tariffs should have very modest US GDP implications," Gallagher wrote Friday. "It is the unknown extent of escalation and the growing distrust among trading partners that could pose greater problems."