Odds of recession higher under Donald Trump, says Citi's Lee

Clinton vs. Trump: Best for economy?

The odds of a recession are much higher if Donald Trump becomes president over Hillary Clinton, Citigroup's William Lee said Wednesday.

"All of his trade policies may not only cause the lowering of our imports but it could cause retaliation on the part of our exporters and so that could contract trade," Lee, head of North American economics at Citi, told CNBC's "Power Lunch."

"We think that would be the source of a recession sooner than later under Trump."

Clinton, on the other hand, will probably continue the current trade policies, he said.

Lee co-authored Citi's latest note on the economic impact of either a Clinton or Trump presidency. The firm said there is a 65 percent probability that Clinton will win.

Donald Trump
Carlo Allegri | Reuters

CNBC senior contributor Larry Kudlow, an informal advisor to the Trump campaign, took issue with Lee's characterizations.

"Hillary Clinton has become a bigger protectionist than Trump, he told "Power Lunch," noting that Trump isn't against trade, he just wants deals enforced properly.

Kudlow believes Trump will reignite the economy with a substantial reduction in business taxes.

However, Lee said that the trade policy is in the forefront because the taxes may have difficulty making it through Congress.

He believes Clinton will be a continuation of "more of the same."

"More of the same is part of that negative investment that we've seen for the last three quarters, the low productivity growth that we've seen in the last six years," Lee said. "So there's no question that there are structural issues that the Clinton administration and program has not really tried to address."

Trump campaign shake-up

Caputo: Trump will always be Trump

Meanwhile, Kudlow praised the shake-up in Trump's campaign. Kellyanne Conway has been promoted to campaign manager and Stephen Bannon, co-founder of conservative Breitbart News, has been hired as campaign CEO.

"You needed bulk at the top because they had huge infrastructure increases and somebody's got to manage that," he said.

Michael Caputo, former senior campaign advisor to Trump, also thinks it's a great move. He said Conway is data driven and evidence based in everything she does.

"Mr. Trump respects, listens to her, trusts her. That's a great person to have at his side when he's traveling," he told "Power Lunch."

"I think this campaign is onto something."