Larry Summers warns GOP corporate tax reform could cause 'huge' dollar spike; global shock

Larry Summers: Here's what worries me about Trump's tax reform plan...

Former Clinton Treasury Secretary Larry Summers told CNBC on Tuesday he sees a number of red flags in the corporate tax reform proposals emerging from President-elect Donald Trump and House Speaker Paul Ryan.

Ryan met with top Trump advisors Monday to discuss his tax plan, "A Better Way Forward," which includes calls for lowering corporate tax rates, taxing imports and instituting a territorial approach to end U.S. taxation of foreign profits of American-based companies.

While supporting a lower rate, Summers warned the other measures would cause worldwide pain, such as "potentially a huge spike in the dollar, which disrupts the financial furniture."

Such a scenario would "cause debt crises in some emerging markets ... [and] disrupt the American manufacturing base," the Democratic economist said on "Squawk Box."

In a Washington Post op-ed on Sunday, Summers argued the GOP plan would "likely to do significant damage to the tax base and to the U.S. and global economies."

Reiterating those sentiments on CNBC Tuesday, he acknowledged a reduction in corporate taxes means sense, but "not with a protectionism twist." There's no need to overhaul the whole system, he added.