Commerce Officials Defend Tariffs, Suggest President Has Leeway to Delay Auto Tariffs Past November
Commerce Secretary Wilbur Ross and Assistant Secretary for Enforcement Jeffrey Kessler defended the Trump administration's aggressive use of tariffs, at a Federalist Society event Oct. 15. Ross said, "I believe the Chinese came to the negotiations primarily because we imposed substantial tariffs on them," and he touted their promise to buy $40 billion to $50 billion worth of agricultural commodities over a two-year period. He said that's more than twice the typical annual sales figure before the retaliatory tariffs from China on soybeans, pork and other goods.
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Tariffs are "why Japan agreed to buy more meat," he said, and why the Koreans renegotiated the U.S.-Korea free trade deal. He later said that the U.S.-Japan trade deal provided 90 percent of the benefits of the Trans-Pacific Partnership without having to offer concessions to other TPP countries, concessions he described as harmful. He said that the deal should generate about $7 billion in additional agricultural sales to Japan, and said, "that’s about 40 percent of the agricultural trade we lost to Chinese retaliations."
Ross said, "Fear of tariffs also caused the EU recently to agree to buy more agricultural products from us and to begin negotiations on other topics." Ross was referring to Section 232 tariffs on autos or auto parts. Those tariffs are on hold for six months to give the U.S. Trade Representative and European Union time to negotiate (see 1905170001) to solve the problem of a lower market share of domestic auto companies in the U.S. and barriers to auto exports to Japan and Europe.
By all accounts, Europe has not negotiated about auto market access or any other market access issues during that time because U.S. politicians insist that agricultural access be on the table, and the European Union refuses to talk about ag. When asked by International Trade Today if that lack of negotiations means tariffs are coming in mid-November, Kessler said: "If you look at the executive order ... it calls for the U.S. trade representative to provide an update to the president six months after the issuance of that order, in November, so that will be up to the U.S. trade representative and the president."
After Ross's speech, Kessler, former ITC Commissioner Ronald Cass and Donald Cameron, a trade lawyer contesting the constitutionality of the Section 232 steel action, discussed whether current trade policy is working, is justified, and qualifies as "free and fair trade."
Cameron said it's managed trade. Kessler said free-trade advocates invoke Smoot-Hawley to say that any use of tariffs is bad. "The administration views tariff more neutrally," he said. They "can be used to achieve economic objectives, geopolitical objectives, and so on."
He started to say that the U.S. has tariffs on "a lot of imports" but corrected himself to say "some imports," and said having higher tariffs on $400 billion worth of imports should be viewed in the context of a more than $20 trillion economy.
Cameron also said that the steel exclusion process is a mess. Kessler responded, "We're proud of the way the exclusion process is working; the process is based on objective criteria."
An audience member's question seemed to support the Section 232 steel action, as she suggested to Cameron that the Commerce Department had a more long-sighted view of national security and steel than the Pentagon. Cameron replied that steel is the most protected industry in America, and that antidumping and countervailing duty decisions reduced import competition. "It's even more protected than the textile industry was," he said. The questioner retorted that we see what happened to the textile industry.