Trump: ‘Trade wars are good’
President tweets out defense of protectionist policy, vows to impose more restrictions
WASHINGTON >> President Donald Trump on Friday declared a global trade war and said it would be “easy to win,” promising to hammer “reciprocal taxes” on any country that charges tariffs on U.S. goods and services.
His threats, made in a series of Twitter posts, looked to escalate his new protectionist policies far beyond the steel and aluminum tariffs he said he would impose next week. Instead, he vowed to impose trade restrictions on any country that he felt had an unfair trade relationship with the United States, following through on nationalist threats that many aides had spent more than one year trying to contain.
Trump tweeted: When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
Over the past 24 hours, Trump has drawn the blueprints for the most protectionist U.S. trade policy in roughly 100 years. The White House has provided no information or details about how these trade practices would go into effect. Instead, they’ve been sketched out in rough terms in off-the-cuff remarks after a meeting with steel and aluminum executives and in a series of social media posts that many trade experts said
grossly misrepresented how trade works.
Eswar Prasad, professor of trade at Cornell University, said Trump’s embrace of broad and stiff import restrictions had little precedent in the past 100 years. He said Trump could succeed in limiting U.S. imports but it could come at the cost of limiting U.S. exports, hurting growth and trade around the world.
“What we have seen in the last 24 hours is something much, much broader, and could escalate into very high levels of tariffs that affect a lot of trading partners,” he said. “There is no immediate historical precedent to this.”
Many Republicans on Capitol Hill have expressed alarm at Trump’s sudden insistence on broad steel and aluminum tariffs and have frantically tried to get Trump to back away from his vow. Foreign leaders, meanwhile, have responded swiftly, saying they will retaliate with tariffs of their own meant to inflict economic pain on U.S. industries, some of which happen to be in politically sensitive parts of the country.
Jean-Claude Juncker, president of the European Commission, said the European Union was preparing retaliatory tariffs against Harley Davidson motorcycles, Levi’s blue jeans, and Kentucky bourbon, a move that could enrage Senate Majority Leader Mitch McConnell, R-Ky.
Canadian officials said the steel and aluminum tariffs would be unacceptable and that they would retaliate if it affected their exports to the United States. A number of other countries also expressed alarm. German politician Bernd Lange, who heads the trade committee at the European Parliament, shot back: “With this, the declaration of war has arrived.”
But some of Trump’s supporters in the tariff decision said they were undeterred. Commerce Secretary Wilbur Ross, speaking to CNBC, said the impact of the increase would be broad but not as painful as many companies are alleging, holding up soup and soda cans that he said would be hardly impacted.
He said other countries would only lose if they vowed to respond with tariffs on U.S. agricultural products, as it would drive up costs for their own consumers.
“This is scare tactics by the people who want the status quo, the people who have given away jobs in this country who have left us with an enormous trade deficit,” he said.
In a series of Twitter posts, the first of which was launched before 6 a.m., Trump argued that the United States was being ripped off by other countries because the U.S. imports more goods from other countries than it exports to them.
Many economists and trade experts have said this is how free trade works, particularly because the United States is the world’s wealthiest nation and wants access to foreign markets. But Trump believes that this is a reflection that importers take advantage of weak U.S. trade policies.
Trump is imposing the steel and aluminum tariffs by utilizing legal provision that allows the White House to take steps if it can argue that imports threaten the national security of the United States. Trump’s comments on Thursday and his Twitter posts on Friday made no mention of national security but, instead, referenced what he said was an unfair dynamic where the U.S. buys more from other countries than those nations buy from the U.S.
In a subsequent Twitter post, Trump threatened to hit any country in the globe with “RECIPROCAL TAXES” if it has an import duty on U.S. goods or services. It’s unclear what this means or how it would work.
The Twitter post suggests Trump is not worried about the blowback from enacting a protectionist trade agenda. It could mean that he is equally willing to walk away from efforts to renegotiate the North American Free Trade Agreement and try to terminate that pact if he doesn’t get terms that he demands later this year.
Global stock markets fell sharply Friday on both worries over Trump’s planned tariffs and his cavalier comments on a possible trade war. Losses in Asia were led by Japan’s Nikkei, which closed down 2.2 percent. In Europe, Germany’s DAX was off by more than 2 percent in midday trading. France’s CAC 40 and the FTSE 100 in London also slumped.