'Everybody loses': Robert Reich warns Trump’s 'trade war' will bring 'the end of the American hegemony'

Liberal economist Robert Reich has been a scathing critic of President Donald Trump's steep new tariffs, warning that a wide variety of goods imported into the United States will soar in price in the weeks and months ahead.

During an appearance on CNBC's "The Bottom Line," posted on May 19, Reich warned that higher prices won't be the only negative result of Trump's tariffs. The U.S. dollar, according to Reich, may cease to be the reserve currency — which would significantly decrease American influence in the world and bring about "the end of the American hegemony."

Reich told host Lindsey Jacobson, "Having the dollar be the reserve currency helps all of us Americans here because we get, in a sense, a free ride. We get the benefits of the rest of the global economy investing in us."

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Trump's tariffs, Reich observed, are creating "chaos" — which is something that businesses dread.

"The problem with chaos is that nobody dares makes any investments," Reich explained. "In fact, a lot of global investors are pulling their money out of the United States right now because of the uncertainty. Uncertainty is the enemy of investment. Uncertainty is the enemy of economic growth. Uncertainty is the enemy of, really, what you want in an economy. And the problem, in a nutshell, is that the president doesn't seem to know what he wants."

Reich described Trump's tariffs as a throwback to the protectionist Smoot-Hawley Tariff Act of 1930, signed into law by Republican President Herbert Hoover.

Many economists believe that Smoot-Hawley, which followed the Wall Street meltdown of 1929, made the Great Depression even worse. And Hoover suffered a humiliating defeat when, in the 1932 presidential election, Democratic nominee Franklin Delano Roosevelt won the popular vote by 17 percent and picked up 472 electoral votes.

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Reich, who served as labor secretary in the Clinton Administration during the 1990s, warned that low-income Americans will be hit especially hard by Trump's tariffs.

Reich told Jacobsen, "Every consumer, effectively, is poorer. It is a regressive tax in the sense that consumers who have lower incomes. They have to pay a larger portion of their incomes in the form of this tariff tax…. Everybody loses. Nobody wins from a trade war."

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Watch the full video at this CNBC link.