Trump digs in despite market slide: ‘Trade wars are good’
(CNN) — President Donald Trump dug into his protectionist trade position on Friday, arguing that trade wars can be good and vowing to slap reciprocal tariffs on any goods even as his actions rattle markets and anger US allies.
The tweets were a retrenchment of long-standing views on trade that Trump hopes will rally his base and spur job creation in the United States. But the views have worried investors — markets opened sharply lower — and even some of Trump’s own advisers have resisted the harsh new actions.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump wrote on Twitter early Friday.
He added, “Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!”
Later Friday, he tweeted: “We must protect our country and our workers. Our steel industry is in bad shape. IF YOU DON’T HAVE STEEL, YOU DON’T HAVE A COUNTRY!”
The series continued later Friday morning when Trump floated the prospect of tit-for-tat tariffs on products entering the US.
“When a country Taxes our products coming in at, say, 50%, and we Tax the same product coming into our country at ZERO, not fair or smart,” Trump wrote.
“We will soon be starting RECIPROCAL TAXES so that we will charge the same thing as they charge us. $800 Billion Trade Deficit-have no choice!”
The flurry of trade-related dispatches came a day after Trump announced he would soon impose a 25% tariff on steel imports and 10% tariff on aluminum. The announcement caught investors off guard and immediately raised concerns about retaliation from China or other major US trading partners.
The Dow closed down 420 points Thursday and both the Nasdaq and the S&P 500 dropped about 1.3%. Futures on Friday morning indicated that the market was in for another rough day.
It’s unclear if certain countries would be exempt from the tariffs, but Trump said in a meeting with industry executives, “People have no idea how badly our country has been treated by other countries.”
The President’s move to make good on a campaign promise has sharply divided his economic advisers. Republican lawmakers, including House Speaker Paul Ryan, expressed concern Thursday and asked that Trump reconsider to avoid “unintended consequences” and retaliation that could ultimately hurt American companies and workers.
But Trump is “pretty committed to moving this forward” and has not been phased by the stock market’s reaction, according to White House press secretary Sarah Sanders.
Sanders told reporters Friday she doesn’t expect the tariff percentages that Trump announced to change as the policy is being written up for him to sign next week, “but some of the other details have to be finalized.”
The European Union and Canada, a big supplier of steel to the US, both condemned the President’s decision and hinted at retaliation. China could slap its own tariffs on American imports to the country, potentially harming US farmers since China is the biggest buyer of US soybeans.
American manufacturers also depend on selling their products abroad and could be hurt by tariffs enforced overseas by retaliating countries.
Trump’s tariffs would also likely raise the prices of common aluminum products in the US — such as beer cans and household appliances — assuming the manufacturing companies decide to pass the cost of the tax on to customers, which is the historical trend.