Commerce Secretary Howard Lutnick said President Trump's tariffs were “worthy.”
The economist warns that the president's strict tariffs in Canada and Mexico, a 30-day suspension, 20% collection on China, and his sweeping aluminum and iron tariffs could reheat inflation.
Trump's pre- and post-election approach to implementing tariffs, and the costly risks of retaliatory tariffs, wiped out profits after the election and surprised the fierce market volatility.
However, Lutnick stubbornly defended the president's trade policy on Tuesday. Interview with CBS News.
“These policies are the most important things America has ever had,” Rutnick said. “It's worth it.”
He quickly shifted gears, adding, “The only reason it could be a recession is because of Biden's nonsense we had to live with.”
“These policies generate revenue. They generate growth. They produce the factories that are being built here,” he continued.
Earlier this week, Trump refused to rule out his policies could lead to a recession.
“I hate predicting such things,” he said. He told Fox News. “What we do is so big, there is a period of transition. We bring wealth back to America. It's a big thing, there's always a period and it takes a little time. It takes a little time, but I think it should be great for us.”
The president is facing backlash after threatening to double tariffs on steel and aluminum imports by 50%, aiming to Canada.
“The only thing that makes sense is that Canada will become our precious 50 first states.” He wrote Tuesday's Truth Social Post. “This will create all the tariffs and eliminate all else entirely.”
The duties were eventually enacted on Wednesday at the original 25% rate.
Lutnick claimed that Trump's flip-flop on the proposed tariffs serves its purpose as a negotiation tool.
“You're negotiating with someone and they're not paying attention and the president, the best deal maker they've sat in that chair, is going to say, 'Here's my response,'” Lutnick told CBS News. “And suddenly, shockingly, they answer.”
He said the market will learn to adapt to the president's tactics, denying that there is confusion in Trump's tariffs.
“It's not like it's a confusing thing. Only stupid people think it's a confusing thing,” Rutnick said.
For example, the 50% threatening tariff in Canada was to “break the Ontario man who said he would tax American energy 25%,” in an obvious reference to Ontario Premier Doug Ford.
On Thursday, Trump created the latest threat. 200% tariff on all alcohol products coming from the European Union.
Soon, countries negotiating with the US will “recognise that there is no need to do this,” Rutnick continued.
“Let the deal maker do the deal,” he said.
