Trump claims 'trade wars' are 'easy to win' day after tariff talk roils stock market
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U.S. President Donald Trump said on Thursday the United States would impose tariffs of 25 percent on steel imports and 10 percent on imported aluminum, starting next week. Rough Cut (no reporter narration).
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WASHINGTON — President Trump declared Friday that “trade wars” with other countries would be “good and easy to win,” a day after his pledge to put tariffs on steel and aluminum drew threats of retaliation from other countries and tanked the American stock market.
“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,” Trump tweeted early in the morning. “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!”
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!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
As economists argued that a new trade war would lead to higher prices for American consumers, Trump also ventured into a discussion about trade taxes; apparently likening tariffs and duties to taxes, Trump claimed in another tweet thatsome countries are taxing American products at up to 50%, while the U.S. charges nothing.
“Not fair or smart,” Trump tweeted. “We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!”
When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart. We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
He did not explain what he means by “reciprocal taxes.”
Governments from China to Canada to the European Union have criticized Trump’s proposed tariffs, and suggested retaliation against U.S. products that could range from Kentucky bourbon to Florida orange juice, rising prices for those and other products. Some said Trump doesn’t understand how the global trading system works.
Trump’s tweeted declaration came a day after he announced he would place tariffs of 25% on steel imports and 10% on aluminum imports.
Trump did not disclose details, including which specific countries might be affected and whether there would be any exemptions, but he said paperwork would be signed next week.
The Dow Jones industrial average fell more than 400 points in the wake of Trump’s comments.
More: Trump says he will impose tariffs on steel and aluminum imports ‘next week’
China is believed to be Trump’s top target. His tweeted reference to a $100 billion trade reference appeared to refer to the Chinese.
Chinese officials were in Washington, D.C., on Thursday as Trump made his tariff comments. The White House later said that various administration officials met with the Chinese about the announcement; the group included aides who tried to persuade Trump to hold off on the tariffs, Treasury Secretary Steve Mnuchin and economic adviser Gary Cohn.
In a follow-up tweet, Trump said: “We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”
We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
Financial analysts questioned the wisdom of a president declaring a trade war that could lead to price hikes for any number of goods and services. They said Trump’s rhetoric alienates allies who are needed for economic growth as well as national security.
“Trade Wars = Good … Something I never thought I’d hear a US president say,” tweeted Ian Bremmer, president of the Eurasia Group, a political risk consulting firm.
Trade Wars = Good
Something I never thought I’d hear a US president say.
— ian bremmer (@ianbremmer) March 2, 2018
Other countries are sounding alarms about Trump trade policies.
“The foundations of our trade policy system are under threat,” said Mark Rutte, prime minister of The Netherlands. “We must protect, but not fall into the trap of protectionism. A possible short-term gain for a few means a long-term loss for the many.”
Skeptics, including some Republican lawmakers, objected to Trump’s comments by saying that trading partners and rivals would slap counter-tariffs on U.S. products and increase costs worldwide.
“The President is proposing a massive tax increase on American families,” said Sen. Ben Sasse, R-Neb., adding that “you’d expect a policy this bad from a leftist administration, not a supposedly Republican one.”
The American International Automobile Dealers Association said car sales are already flat, and “the burden of these tariffs, as always, will be passed on to the American consumer.”
Trump based much of his 2016 presidential campaign on claims that trade policies of China and other countries have undercut the United States, particularly its manufacturing sector. That argument won support in industrial areas of Pennsylvania and Michigan, two states that helped Trump win the election over Democrat Hillary Clinton.
The president has also talked about re-working existing trade deals, including a free trade agreement with South Korea and the North American Free Trade Agreement with Canada and Mexico.
Citing those campaign pledges, White House spokeswoman Sarah Sanders said Trump is sticking up for the American worker, and no one should be surprised by the tariff announcement.
“This is something the president has wanted to do for quite some time,” Sanders said.