Cannot use JSX unless the ‘–jsx’ flag is provided

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I have looked around a bit for a solution to this problem. All of them suggest adding "jsx": "react" to your tsconfig.json file. Which I have done. Another one was to add "include: []", which I have also done. However, I am still getting the error when I am trying to edit .tsxfiles. Below is my tsconfig file.

{
    "compilerOptions": {
        "module": "commonjs",
        "target": "es5",
        "allowJs": true,
        "checkJs": false,
        "jsx": "react",
        "outDir": "./build",
        "rootDir": "./lib",
        "removeComments": true,
        "noEmit": true,
        "pretty": true,
        "skipLibCheck": true,
        "strict": true,
        "moduleResolution": "node",
        "esModuleInterop": true
    },
    "include": [
        "./lib/**/*"
    ],
    "exclude": [
        "node_modules"
    ]
}

Any suggestions would be helpful. I am using babel 7 to compile all the code with the env, react and typescript presets. If you guys need more files to help debug this, let me know.

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