Trump Official Dismisses Warnings About Trade Tensions As 'Hiccups'

Jul 2, 2018
Originally published on July 2, 2018 6:35 pm

The Trump administration is doubling down on its trade rhetoric, even as other countries ready tariffs on American goods and U.S. business groups part company with the president over his trade policies.

"The president is trying to fix long-term problems that should have been dealt with long time ago [and] weren't, and there obviously is going to be some pulling and tugging as we try to deal with very serious problems. So there will be some hiccups along the way," Commerce Secretary Wilbur Ross told CNBC Monday.

Ross was asked whether trade frictions were to blame for the lackluster performance of the U.S. stock market recently. The Dow Jones industrial average is down slightly for the year.

The remarks came as tensions between the U.S. and its trading partners are ramping up, with tariff threats and counterthreats echoing through the global economy.

Trump is preparing to impose tariffs on an additional $34 billion in Chinese imports on Friday, a move that China has promised to match.

Over the weekend, Canada responded to U.S. tariffs on steel and aluminum by imposing tariffs on $12.6 billion worth of U.S. goods including coffee, whiskey and aluminum products.

Meanwhile, the European Union released a statement warning that Trump's proposed tariffs on auto imports would harm the U.S. economy.

As conflicts escalated, some major business lobbies that are usually among Trump's biggest supporters were pushing back.

The U.S. Chamber of Commerce released an analysis of how tariffs would affect all 50 states. Among the states that are hardest hit are Washington, California and Ohio.

In a statement, the chamber's CEO and president, Thomas Donohue, said:

"Using a combination of tariffs and tough negotiating tactics, the Trump administration is attempting to solve a number of real and serious trade challenges facing America around the world. Its approach, however, runs the risk of erasing the recent economic gains it worked so hard to secure through tax and regulatory relief without even solving the underlying problems."

Those sentiments were echoed in an MSNBC appearance Monday by Tim Phillips, president of the Koch brothers-funded group Americans for Prosperity.

"This administration deserves a lot of credit for this economy doing better. Their tax cuts, tax reforms, eliminating barriers on the regulatory front," Phillips said. "But these tariffs risk undermining everything good that's been happening."

Phillips also said his group supported proposed legislation that would make it harder for the White House to impose tariffs unilaterally.

But Trump has shown no signs of backing down so far. For example, he has continued to bash Harley-Davidson, which last week said it would move production of some motorcycles overseas to avoid new tariffs imposed by the European Union.

"I devoted a lot of time to Harley-Davidson. I treated them good," Trump said in an appearance on Fox News.

"I think that Harley is an American bike. It's an American motorcycle. And they should build them in this country," he added. Trump predicted that as a result of its decision, the company would "take a big hit. Those are my voters. They don't want Harley-Davidson getting cute to make $2 more."

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Tensions over President Trump's trade policies are growing this week, and some surprising groups of people are unhappy about it. Organizations that typically support Trump say the tariffs against major U.S. trading partners could undermine the strong economy. The Trump administration is showing no signs of backing down. For the latest, we're joined by NPR's Jim Zarroli. Hi, Jim.


SHAPIRO: The U.S. Chamber of Commerce put out a statement today taking issue with the president's trade policies. Tell us about what the statement said.

ZARROLI: Well, one of the things it said - it's - it really - it had a kind of an analysis in it of how much the tariffs will cost every state. So state economies in some states, like Washington and Ohio, will lose billions of dollars, as much as $6 billion. It also said, you know, the president has done a lot of things right in the economy, like the tax cuts. But a trade war could really undermine that. Then, Tim Phillips of Americans for Prosperity, which is a Koch brothers-funded group, said virtually the same thing on MSNBC today.


TIM PHILLIPS: This administration deserves a lot of credit for this economy doing better, with their tax cuts, tax reforms, eliminating barriers on the regulatory front. But these tariffs risk undermining everything good that's been happening.

ZARROLI: And the important thing here is not just that they don't like Trump's policies. It's that groups like the Chamber of Commerce and Americans for Prosperity, they have a lot of money to spend. And they're saying that they're willing to use it to fight the Trump administration's policies.

SHAPIRO: And outside of the U.S., the president is doing battle with some of America's major trading partners. Explain how this is playing out.

ZARROLI: It - (laughter) well, it's not playing out well. Over the weekend, Canada imposed some tariffs on U.S. exports, things like whiskey, coffee products. The European Union came out with some comments the other day about Trump's proposed tariffs on autos. It said this will only backfire against the U.S. And this coming Friday, the Trump administration is supposed to slap some tariffs on Chinese imports, and China is going to retaliate. It's drawn up this long list of American products that is - that are going to be affected.

So you know, Trump has said many times that the - you know, once the U.S. started getting on - tough on what he says are these abusive trading practices, that other countries would give in. And there's simply no sign of that happening at this point.

SHAPIRO: And is there any sign that all this pushback is swaying the administration?

ZARROLI: Not really. I mean, Wilbur Ross, the Commerce secretary, he's been one of the big trade hawks in the administration. He was on CNBC today. He was asked about the fact that the stock market has been pretty lackluster this year. And a lot of people think that's because of the trade war. And so he - Ross was asked, how much of a drop in the markets are you willing to tolerate until you change course on trade? And this is what he had to say.


WILBUR ROSS: The president is trying to fix long-term problems that should have been dealt with long time ago - weren't. And there obviously is going to be some pulling and tugging as we try to deal with very serious problems.

ZARROLI: And then Trump over the weekend have had some really strong words about trade, especially about the European Union. He said - he was on Fox, and he said in an interview, they treat us very unfairly. He actually said the European Union is possibly as bad as China, just smaller. And he said every country that has a trade deficit with the United States should be subject to tariffs. So he's not backing down.

SHAPIRO: All right. NPR's Jim Zarroli. Thanks, Jim.

ZARROLI: You're welcome. Transcript provided by NPR, Copyright NPR.