Treasury Secretary Steven Mnuchin said the Trump administration isn’t trying to provoke a global trade fight with the steel and aluminum tariffs announced last week.
“We are not looking to get into trade wars,” Mnuchin said March 6 during a congressional committee hearing when asked about the tariffs.
After announcing the steel and aluminum tariffs, President Donald Trump tweeted on March 2, “trade wars are good, and easy to win.”
Mnuchin told a House Appropriations subcommittee that Canada is an important steel supplier and that the metals tariffs won’t apply to Canada or Mexico if NAFTA is successfully renegotiated. He added that the NAFTA renegotiation is an administration “priority,” along with shifting trade with China to a “fair and balanced” relationship.
The European Union is raising the stakes for the Trump administration with tit-for-tat tariffs of 25% to hit $3.5 billion of U.S. goods. The EU is targeting iconic U.S. brands produced in key Republican constituencies on a range of consumer, agricultural and steel products that will be levied if Trump goes through on his tariff threat, according to a list drawn up by the European Commission.
The list of targeted U.S. goods — including motorcycles, jeans and bourbon whiskey — sends a political message to Washington about the potential domestic economic costs of making good on the president’s threat.
Paul Ryan, Republican speaker of the House of Representatives, comes from the same state — Wisconsin — where motorcycle maker Harley-Davidson Inc. is based. Earlier this week, Ryan said he was “extremely worried about the consequences of a trade war” and urged Trump to drop his tariff proposal. Ryan’s comments are among an unusual campaign by Republicans in Congress to thwart the tariffs, showing a rare public break between GOP leaders and Trump.
Some Trump aides and Republican lawmakers are making a final push to stop the tariffs. White House economic adviser Gary Cohn is summoning executives from U.S. companies that depend on the metals to meet this week with Trump to try to persuade him to blunt or halt the tariffs announced last week, according to two people familiar with the matter.
The tariffs could reduce U.S. growth by as much as 0.2%age point this year, and further risk lies in how trading partners respond, Barclays Plc economists said. While a tight job market and tax cuts are likely to keep America’s expansion humming along, the trade tensions could weigh on growth and boost inflation more than desired by Fed policy makers.