The U.S. and global market slide following President Donald Trump’s announcement of coming steel and aluminum tariffs “a tremendous overreaction,” says Commerce Secretary Wilbur Ross.
Asian markets were sharply down Friday, as were ones in Europe one day after American indices dipped following Trump’s announcement that he intends to slap 25 percent tariffs on steel imports and a 10 percent one on aluminum that comes into the United States. Markets in the U.S. opened down Friday and continued to show losses at time of publication.
Ross on Friday contended those penalties will not translate into higher costs for U.S. consumers when they purchase products like canned soup and sodas, saying the tariffs will be “no big deal” for consumers.
Republican lawmakers by and large viscerally disagree. “Let’s be clear: The President is proposing a massive tax increase on American families. Protectionism is weak, not strong. You’d expect a policy this bad from a leftist administration, not a supposedly Republican one,” Sen. Ben Sasse, R-Neb., said in a statement, a relatively typical response.
Appearing on CNBC, Ross argued the expected effect on such consumer items will be price hikes in the tenths of cents. He held up cans of Campbell’s Soup (steel) and Budweiser (aluminum), arguing the Trump administration expects prices of such items will rise by less than a cent once the tariffs are implemented.
“In a can of Campbell’s Soup, there are about 2.6 pennies worth of steel,” he said. “So if that goes up by 25 percent, that’s about six-tenths of one cent on the price on a can of Campbell’s Soup.”
For automobiles, he predicted a “one half of one percent price increase on a typical $35,000 car.”
The Commerce secretary said he expects a “broad” but ultimately “trivial” change on consumer goods.
“What was announced yesterday by the president,” he contended, “is a very broad concept.”
On Thursday, White House Press Secretary Sarah Huckabee Sanders told reporters Trump did not consider how other countries might retaliate when he made the decision to green-light the steel and aluminum tariffs.
Ross on Friday attempted to downplay such worries, saying warnings to that end are being overblown, calling such concerns “scare tactics by people who want the status quo” and “left us with a tremendous trade deficit.”
One reason is, he said, America often is such a major and dominant player on trade that countries would struggle to find other suppliers for U.S.-made goods on which they might respond by imposing their own tariffs.
“The reason we’ve had to go this route is the conventional trade methods don’t solve the problem of global overcapacity and global dumping,” he told the network. “It has to be broad, it has to be global in its reach.”
Earlier Friday, Trump took to Twitter to defend his coming trade actions, writing “trade wars are good” and saying the U.S. steel industry must be protected because “IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”