President Donald Trump’s escalating trade offensive endangers a growing number of local companies and American jobs, a powerful US business group warned Monday.
But the Trump administration persisted in defending its burgeoning, multi-front trade war, with Commerce Secretary Wilbur Ross saying the world’s largest economy was robust enough to face the economic blowback.
But the US Chamber of Commerce said key trading partners have hit back against Trump’s aggression with tariffs on $75 billion in American exports so far.
And although Trump himself denied reports he plans to withdraw from the World Trade Organization, which the US helped create, a media report late Sunday said the White House had drafted legislation that would allow the president to impose tariffs without congressional approval and largely outside WTO rules.
Steep US tariffs on more than $30 billion in Chinese imports are due to take effect on Friday as retribution for Beijing’s alleged theft of US intellectual property.
Meanwhile, Canada retaliated against US steel and aluminum tariffs by imposing retaliatory duties on $12.6 billion in American goods starting Sunday. Ottawa targeted American steel and aluminum as well as goods from politically sensitive regions like Florida orange juice and Kentucky bourbon.
That followed EU decision to impose 20 percent tariffs on over $3 billion in US goods, including motorcycles, blue jeans and bourbon, as well as orange juice and peanut butter.
Thomas Donahue, president of the influential US Chamber of Commerce, said Monday the tariffs were ‘simply taxes that raise prices for everyone.’
The US Chamber highlighted vulnerable exports from states that had supported Trump in his surprise 2016 presidential election victory, including $2.3 billion in Michigan steel and aluminum goods as well as autos, $1.7 billion in Pennsylvania steel, iron, coffee and baked goods, and $1 billion in Wisconsin cheese, toilet paper and ginseng.
The US Chamber also published an interactive map on the internet showing the impact of the trade dispute in all 50 states.
The states with the most to lose are Washington, which borders Canada and had $6.2 billion in threatened exports, coastal energy hub Louisiana, at $5.9 billion, and California, the nation’s most populous state, with $5.6 billion, according to the analysis.
Quitting the WTO?
But Ross said Monday the American economy had shown no signs of stuttering due to the rising trade barriers, with high capital expenditures, rising capital repatriation and vigorous jobs markets.
‘So I think all these claims about the sky is falling are at least premature and probably quite inaccurate,’ Ross said on CNBC.
Meanwhile, a monthly survey of American manufacturers found companies are ‘overwhelmingly’ concerned by Trump’s trade policies, the Institute for Supply Management reported Monday.
Adding to the uncertainty, political news website Axios said Sunday a draft bill crafted by the White House at Trump’s request – dubbed the Fair and Reciprocal Tariff Act – would allow the president to impose goods tariffs on imports from any country he believes unfairly taxes similar US goods sold in the opposite direction.
The proposal was met with criticism and derision, with some dubbing the bill the FART Act, in keeping with Washington’s reliance on acronyms.
The White House has denied that it intends to pull out of the World Trade Organization but such legislation would be fundamentally at odds with WTO rules.
In his interview on Monday, Ross said it Washington was critical of the WTO but not immediately planning to exit the organization.
‘We’ve made no secret of our view that there are some reforms needed at the WTO,’ he said. ‘I think it’s a little premature to talk about simply withdrawing from it.’
Wall Street stocks on Monday started the third quarter lower and were mostly in the red by mid-afternoon, with investors continuing to pull back on fears a trade war will dampen US economic momentum.
But Ross also told the network falling stock markets would not cause the administration to reverse course.
‘There’s no bright line level of the stock market that’s going to change policy,’ he said.
The United States is tackling long-term problems and ‘there obviously is going to be some pulling and tugging as we try to deal with very serious problems, so there will be hic-cups along the way.’