Larry Kudlow, the Reagan administration economist who also advised the Trump campaign, said the White House needs to address concerns about unfair trade within a broader framework of negotiations, not targeted tariffs and quotas that punish U.S. consumers.
Kudlow discussed trade policy a day after President Donald Trump slapped tariffs on imported solar equipment and washing machines. China and South Korea condemned the levies, with Seoul set to complain to the World Trade Organization about the "excessive" move.
“I'm not saying America shouldn't seek fair trade. I'm a free trader,” Kudlow said on cable channel CNBC. “But where there are violations, violations should be corrected and negotiated. These one shots — that's not an orderly process, you see. And consumers do hurt.”
Trump this week is traveling to Davos, Switzerland, to attend the World Economic Forum, where he is expected to re-assert the “America First” goals of his presidential campaign. He ran on a pro-business platform of cutting taxes and regulations to boost job growth and revive America’s withering middle class.
“These cases were filed by American businesses and thoroughly litigated at the International Trade Commission over a period of several months,” the U.S. Trade Representative, Robert Lighthizer, said in a statement announcing Trump's decision. “The ITC found that U.S. producers had been seriously injured by imports and made several recommendations to the President...The President’s action makes clear again that the Trump Administration will always defend American workers, farmers, ranchers and businesses."
Kudlow cited examples when the U.S. imposed tariffs on foreign-made products like computer chips and steel that were eventually abandoned because they didn’t work and even damaged U.S. industries and workers.
While U.S. makers of solar panels may cheer the tariffs on foreign-made goods, the protectionist measures will make the products too expensive for some consumers. American installers of solar equipment may end up losing sales and cutting jobs to stay in business.
In addition, America’s trade partners may seek to retaliate by slapping U.S.-made goods with tariffs, escalating a trade war that no one is going to win. Samsung Electronics said the U.S. import tax "is a great loss for American consumers and workers. This tariff is a tax on every consumer who wants to buy a washing machine."
“We're going to have negotiations with China obviously,” Kudlow said. “Those processes of negotiation may need to be fixed, I get that. But the president has acknowledged other countries break the law as we see it and he may have a good point there. So it's not a perfect system.”
Last week, Kudlow said President Trump is reluctant to completely withdraw from the North American Free-Trade Agreement with Mexico and Canada because it would send the stock market into a tailspin.
“You’ll knock the stock market down. We’re too intertwined,” Kudlow said. “There's a potential blow up in the stock market if we leave NAFTA. We're talking agriculture. We're talking car parts. We're talking trucking, transportation, energy."
Kudlow said he heard from sources in the White House that Trump is more likely to renegotiate the pact with Canada and Mexico, “as difficult as that’s going to be.” Trump has threatened to withdraw from NAFTA unless there are changes to make the deal better for the U.S.
© 2022 Newsmax Finance. All rights reserved.