US Economy

Trump's tariffs could inhibit US economic growth, former CEO says

Trump's tariffs: Will it be good or bad for U.S.?

Tariffs aren't a good idea because they could inhibit the growth of the United States economy, former Office Depot CEO Steve Odland suggested to CNBC on Tuesday.

President-elect Donald Trump has repeatedly called for tariffs or other taxes on imports into the U.S. On Sunday, he tweeted about the issue again, threatening to hit companies with a 35 percent tariff if they leave the country.

However, the U.S. only has about 5 percent of the world's population, Odland said in an interview with CNBC's "Closing Bell."

"We've got a large economy, but if we want to continue to grow we need access to the other 95 percent," he said. "Trade is a two-way street. We want exports, but you can't then tax imports."

Ian Waldie | Bloomberg | Getty Images

For one, it will raise costs for consumers, he pointed out. Plus, a lot of imports go into goods manufactured or reassembled in the U.S., Odland added.

"I don't think we should get down the road here of instituting tariffs, which become a tax on our goods and our input costs. I think we have to sit down and work out our differences."

Economist Gary Shilling, president of A. Gary Shilling, isn't necessarily in favor of the tariffs but thinks Trump is really interested in trying to level the playing field.

"He regards himself as the world's best negotiator, and I think what he's really doing is throwing the opening gambit out there on the chess board to see where we go from here," he told "Closing Bell."

However, at the end of the day Trump is going to have to deal with the underlying issues in the U.S., Odland said.

"We need to work on the policy issues around regulation and taxation and that would be best thing that we could do to keep our jobs at home," he noted.