Larry Summers Discusses Tariffs and Artificial Intelligence Advancements

Former Treasury Secretary Larry Summers recently shared his insights on two significant topics – Donald Trump’s tariff proposals and the advancements in artificial intelligence (AI) technology. In an interview with Bloomberg, Summers expressed his concerns and opinions on both subjects.

Summers began by discussing the potential impact of Trump’s tariffs, specifically targeting Canada and traditional European allies. He criticized the use of tariffs as a tool of “power and intimidation,” suggesting that if employed, they should be used more selectively. The economist warned of potential retaliation from other countries, citing historical examples such as the 1930 Smoot-Hawley tariffs, which contributed to the Great Depression. Summers emphasized that countries relying on tariffs as the centerpiece of their economic strategy have not achieved significant success.

Shifting his focus to AI, Summers highlighted the transformative potential of the technology. He acknowledged the significant changes witnessed by previous generations and predicted that the next generation would experience seismic shifts due to AI advancements. However, Summers cautioned about the potential pitfalls associated with AI, particularly the need to manage it effectively to avoid catastrophes. He emphasized the importance of public authorities playing a strong role in ensuring the responsible and beneficial use of AI. Summers, who sits on the board of OpenAI, stressed that slowing down or stopping AI development without considering its positive potential would be detrimental, allowing irresponsible actors or potential adversaries to take the lead.

Summers concluded by reiterating economists’ consensus that systematic across-the-board tariffs should not be pursued for extended periods. He urged a more thoughtful approach to tariffs, considering their potential consequences and the potential for a spiral of retaliatory actions.