U.S. Secretary of Commerce Wilbur Ross, the billionaire investor who oversees trade policy for the Trump administration, said warnings by other countries about the perils of U.S. protectionism are “rubbish.”
“They [Europe, Japan and China] talk free trade, but in fact what they practice is protectionism,” Ross told the Financial Times in an interview. “And every time we do anything to defend ourselves, even against the puny obligations that they have, they call that protectionism. It’s rubbish.”
The U.S. imports much more than it exports, resulting in a $500 billion trade deficit that President Donald Trump wants to shrink by boosting domestic factory growth. America’s manufacturing output dropped to 12-year lows during the Great Recession of 2008-09, and has barely nudged above pre-recession highs.
Trump softened his anti-China stance last week, telling The Wall Street Journal that the country was not a currency manipulator. During last year’s election campaign, he accused China of intentionally weakening its currency to make its goods cheaper for American consumers.
Christine Lagarde, head of the International Monetary Fund, last week called for a defense of the “global economic and financial architecture” while warning that the “sword of protectionism” hung over the world economy. Ross said the criticism was clearly directed at the Trump administration.
“It is! It is! And the response is very simple: we are the least protectionist of the major areas. We are far less protectionist than Europe. We are far less protectionist than Japan. We are far less protectionist than China,” he told the newspaper.
Ross accused Lagarde and other defenders of the current multilateral system of “sloganeering” in trying to preserve a system that caused the U.S. trade deficit to expand since the 1970s.
“’We like it that way. So we don’t want you to disrupt it.’ That’s what they are really saying when you strip it away,” he told the FT. “That’s the bottom line. But that’s not going to happen. Our tolerance for continuing to be the deficit that eats the surpluses of the whole rest of the world — the president is not tolerant of that anymore.”
Ross and Vice President Mike Pence this week visit Japan for talks partly intended to re-negotiate a bilateral trade deal after the U.S. withdrew from the Trans-Pacific Partnership negotiated by the Obama administration. Ross is also working on a plan to address China’s trade deficit with the U.S. and to re-negotiate the North American Free Trade Agreement with Canada and Mexico.
Ross said that Prime Minister Shinzo Abe won’t be able to revive the 12-country TPP without the U.S.
“It doesn’t make that much sense to do a TPP without the U.S. We’re the biggest market, after all,” he told the FT. “And I think you folks are aware there is no political will in the U.S. for a new TPP.”
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