A departing top economic adviser to Donald Trump said the chanceof hitting the president's growth target this year is becoming lesscertain amid risks from the trade war and a ballooning budgetdeficit.

There's increasing uncertainty about America's ability to hitthe 3 percent growth goal that Trump has said the world's biggesteconomy will surpass under his policies, said Kevin Hassett,chairman of the U.S. Council of Economic Advisers. Trump tweetedSunday that Hassett, who was confirmed in September 2017, willleave the position “shortly.”

“I'm still at 3 percent for the year, but the point is: Theuncertainty about the forecast is much higher than the last time wetalked,” Hassett said on CNN on Monday, after being asked about theimpact of the U.S. trade war. Growth in the second quarter waslikely closer to 2 percent, he said. GDP expanded at a 3.1 percentannualized rate in the first quarter.

Hassett also said he was “very much concerned” about the growingfiscal deficit. To boost growth, the U.S. should consider cuttinggovernment spending, he said. “Fiscal consolidation should be onthe table, absolutely,” Hassett said.

The deficit has expanded under Trump, fueled in part by tax cutsand fiscal stimulus that will cost $1.5 trillion over the nextdecade. Trump's latest fiscal blueprint projected the budget won'tbalance for 15 years, despite assuming stronger growth than privateforecasters.

The country's budget deficit rose to about 3.8 percent as apercentage of GDP last year and is expected to hit 5.1 percent thisyear before easing, according to estimates from the White House Officeof Management and Budget (OMB).

Speedier Growth

Trump has repeatedly argued that the U.S. economy can growfaster than 3 percent on a sustained basis, pointing to thebenefits of last year's tax package. But the growth outlook hassince dimmed amid the administration's trade war with China. Trumphas imposed duties on $250 billion of Chinese goods and isthreatening to hit another $300 billion. The president said lastweek he plans to impose new tariffs on Mexico, roiling markets andopening a new front in the conflict.

Economists surveyed by Bloomberg forecast 2.6 percent GDP growththis year, followed by 1.9 percent in 2020. On Monday, thecountry's factory gauge fell to the lowest level ofTrump's presidency as production, inventories, and deliveries alldeclined in May. The sector is on shakier ground as tariffs push upprices and create uncertainty for producers, already reeling fromslowing global growth.

Still, the U.S. job market remainsstrong, with unemployment hovering near a five-decade low and wagegrowth picking up. The U.S. expansion is set to become the longeston record in July.

—With assistance from Reade Pickert andJosh Wingrove.

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