President Trump is defending his plans to levy billions of tariffs on the nation’s closest trading partners even as allies retaliate one by one.
Trump and his top administration officials remain steadfast on his protectionist trade policies, arguing that growing trade deficits prove the United States has been losing on the global stage for years.
The United States has levied hefty steel and aluminum tariffs for national security reasons on all but a handful of countries, hit China with duties over the alleged theft of intellectual property and is contemplating another round of taxes on imported cars.
The tariffs have rocked the relationships with close allies such as Canada, Mexico and the European Union, all of which have retaliated, pushing the world’s top economies to the brink of a global trade war.
{mosads}On Monday, Trump said during a meeting at the White House with Dutch Prime Minister Mark Rutte that if a trade deal can be worked out with the European Union, “it’ll be positive, and if we don’t, it’ll be positive also.”
Rutte’s response was curt: “No. It’s not positive. We have to work something out.”
Trump said that the U.S. will continue meeting with EU officials as they seek a deal moving forward.
On Sunday, however, Trump had said that U.S. allies such as the EU are “as bad as China” on trade, adding that “it’s terrible what they do to us.”
The EU recently imposed $3.2 billion in tariffs on iconic American goods such as bourbon, jeans and Harley-Davidson motorcycles in response to the steel and aluminum tariffs.
Trump says he is using Section 232 of a trade law to impose the duties to protect national security.
Allies argue, though, that they aren’t national security threats and Trump’s move isn’t justified.
The EU is planning another possible batch of tariffs on $3.8 billion worth of goods.
Last week, Trump said the tariffs have been “incredible” and are “doing great.”
He has said that his tough policies on trade will force China and U.S. allies like the EU, Mexico and Canada to the negotiating table to change their policies.
“Every country is calling every day, saying, ‘Let’s make a deal, let’s make a deal,'” Trump said on Sunday.
“It’s going to all work out,” he said.
U.S. allies have not hesitated to meet Trump’s tariffs with hefty reciprocal duties of their own, most coming into force over the course of the past month.
On Sunday, Canada slapped tariffs on $12.6 billion of U.S. goods over the steep steel and aluminum tariffs.
China intends to hit $45 billion in U.S. exports after Trump said he would levy tariffs on $50 billion in Chinese goods. The first round of 25 percent tariffs on $29.6 billion of U.S. exports is expected to start on Friday. Beijing will implement the remaining $15.4 billion at a later time, after gauging U.S. reaction.
Trump has since countered with another round of tit-for-tat tariffs on $200 billion in Chinese goods.
The U.S. Chamber of Commerce on Monday released a new state-by-state analysis of the effects of the retaliatory tariffs from China, the EU, Mexico and Canada.
The analysis shows how much of each state’s exports are threatened by the tariffs, the number of job losses and what consumers stand to lose in a trade war.
“Tariffs are beginning to take a toll on American businesses, workers, farmers and consumers as overseas markets close to American-made products and prices increase here at home,” said Chamber President and CEO Thomas Donohue.
“Tariffs that beget tariffs that beget more tariffs only lead to a trade war that will cost American jobs and economic growth,” Donohue said.
As of this week, approximately $75 billion worth of U.S. exports will be subject to retaliatory tariffs.
But while some trade experts have expressed concerns about how the tariffs may lead to job losses or hurt the economy, Trump and his officials have brushed off those worries.
Commerce Secretary Wilbur Ross touted the strength of the economy as one reason why he thinks the tariffs won’t cause much harm to growth.
“So I think all these claims about the sky is falling are at best premature and probably quite inaccurate,” Ross said.
Another piece of the trade puzzle is whether the U.S., Mexico and Canada can reach an updated deal on the North American Free Trade Agreement (NAFTA).
On Monday, Trump spoke to Mexican President-elect Andrés Manuel López Obrador, saying later he touched on those topics.
“We had a lot of good conversation. I think the relationship will be a very good one. We’ll see what happens,” Trump said.
Formal trade talks on NAFTA have stalled after months of work. Trade watchers expect that negotiations could start up again with the Mexican election over.
In early June, Mexico imposed tariffs on $3 billion of U.S. exports, including pork, apples, potatoes, bourbon and cheese over the metals tariffs.
The White House also is considering a 25 percent tariff on foreign cars, which could hit $350 billion of imports.
Trump has launched a Section 232 investigation into whether those auto imports threaten national security. That investigation started in May and a report could be released later this summer.
Manufacturers and automakers have blasted the administration’s investigation into auto imports, saying it would hurt the economy.
Ross said it’s “premature” to say whether Trump will follow through with his plan to impose tariffs on auto imports.
The EU said it would move to hit the United States with as much as $300 billion in retaliatory tariffs over the autos issue.
Russia on Monday became the seventh World Trade Organization (WTO) member to request talks with the U.S. over the metals tariffs.
Trump and Russian President Vladimir Putin will meet later this month in Helsinki.
Canada, China, the EU, India, Mexico and Norway have all filed their own WTO cases.
The trade cases come as Trump and his administration question whether the U.S. will withdraw from the WTO, a move that would rock the international trade world.
Trump and Ross on Monday continued their criticism of the WTO but said that withdrawal from the global trade group wasn’t happening any time soon.
“The WTO has treated the United States very badly and I hope they change their ways. They have been treating us very badly for many, many years and that’s why we were at a big disadvantage with the WTO,” Trump said on Monday during the Rutte meeting.
“We’re not planning anything now, but if they don’t treat us properly we will be doing something,” Trump said.
Ross said Monday that it is a “little premature” to talk about withdrawing from the WTO.
“We’ve made no secret of our view that there are some reforms needed at the WTO,” Ross said in a CNBC “Squawk Box” interview.
On Sunday, Axios reported that the White House has drafted a bill that would allow Trump to skirt Congress and WTO rules on trade, giving him the power to raise tariffs and set different rates for member countries with little to no oversight, running afoul of long-established global trade rules.