President Trump Asks Business Audience To Elect Republicans to House So He Can Hike Tariffs More Easily
President Donald Trump said everybody thinks it makes sense for the executive branch to be able to hike tariffs on trading partners to the same levels those countries tax the corresponding American products. This proposal, the Reciprocal Trade Act (see 1901240017), was introduced by a Republican who left his office in the middle of the term to work as a CNN talking head. Trump acknowledged that it cannot pass unless Republicans retake the majority in the House of Representatives.
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Trump, who spoke to the New York Economic Club on Nov. 12, spent most of the speech talking about deregulation and tax cuts, but also talked about U.S. energy production and trade policy.
With regard to China, he said American companies aren't paying the tariffs because of Chinese currency depreciation and increased Chinese government support for companies. "Their supply chains are cracking very badly, and they are dying to make a deal," he said. "We're the ones deciding whether or not we want to make a deal. We're close. a significant phase 1 trade deal could happen, and could happen soon," Trump said. He said the 25 percent tariffs on $250 billion in Chinese imports "is going to 15 percent very soon," but it wasn't clear whether that was a concession to get the Phase 1 deal.
A question from the CEO of the Hess Company after the speech said that the cost of tariffs has weighed on the economy, and that capital spending has stalled, and the manufacturing sector is hurting. He asked the president how he would address those headwinds. Trump replied that maybe some things were down "a little bit because of the uncertainty," but then declared "there is no uncertainty." He added, "The real cost, John, would be if we did nothing."
During the speech, Trump said his attitude about the World Trade Organization has changed the outcome of litigation in Geneva. "Because they know that I'm very tentative on the WTO, we're winning cases for the first time," he said, noting the $7.5 billion in tariffs authorized over Airbus subsidies. "We never won cases," he said. That is not true. When the U.S. brought a case, it won 84 percent of the time, but it also lost many cases when other countries complained about its policies they said were restricting imports.
Trump bragged about his administration's rewrite of the Korean free trade agreement and of NAFTA, both of which he said were far better. He said the U.S. will be able to keep the 25 percent duty on imported trucks, "which was all ready to disappear" under KORUS. It would have ended in 2021; now it will last another 20 years.
He called the U.S.-Mexico-Canada Agreement a "whole new" deal compared to NAFTA, and complained that Speaker Nancy Pelosi has not introduced the USMCA for ratification. "Democrats in Washington would rather pursue outrageous hoaxes, delusional witch hunts, which are going absolutely nowhere, don't worry about it," he said.