WH trade adviser: Tariffs will have "negligible" impact on consumer prices
Peter Navarro, director of the Office of Trade and Manufacturing Policy at the White House, says the effect of the Trump administration's new steel and aluminum tariffs on consumer prices will be "negligible to nothing."
"Let me just do a little numbers for you. A six pack of beer or coke -- aluminum, cent and a half at the most in terms of costs," Navarro said on CBS News' "Face the Nation" on Sunday. "Go to the other end of the spectrum. One of the greatest planes ever made, the Boeing 777. Three-hundred-thirty million dollar aircraft, 10 percent tariff on aluminum raises the cost of that by $25,000."
He added, "These effects are second order small and, you know, I think the American people are willing to pay a cent and a half more for a six pack of beer in order to have an aluminum and steel industry."
President Trump made the surprise announcement that his administration will be imposing new tariffs on steel and aluminum imports following a meeting with industry executives at the White House on Thursday. Republican lawmakers were swift in denouncing the president's plan, arguing it could have negative impacts on the U.S. economy and cause prices to skyrocket. The stock markets also took notice -- the Dow Jones industrial average dropped over 500 points in early afternoon trading that day, and the S&P 500 and Nasdaq composite index both fell 1.3 percent.
Mr. Trump later argued that "trade wars are good" and that "if you don't have steel, you don't have a country." As for the threat that the policy would instigate trade conflicts with other countries, namely China, Navarro said, "This is not a China problem"
"China controls 55 percent of the aluminum market and about 50 percent of the steel market. Now, you go back to 2000, in aluminum. We were the largest aluminum producer in the world. Today we have 1.5 percent of the global market share. China's got 55 percent. What's wrong, now what happens is, when they overproduce, it puts pressure on the whole market. But it's not a China problem. You can't get from here to Beijing and solve this problem," said Navarro.
The decision to make the tariff announcement Thursday took many in the White House by surprise, "Face the Nation" moderator Margaret Brennan reported on Thursday. The president had been urged by top economic adviser Gary Cohn and national security officials including Secretary of State Rex Tillerson to wait while the economic team examined the ramifications of such a decision. Brennan was told that Mr. Trump simply "ran out of patience" with the delays and decided to make the call.
Navarro argued, however, that the rollout was far from a surprise since the president has been suggesting such moves "all the way back to the campaign trail."
"The president going back 20 years has identified problems with the loss of our manufacturing to defense industrial base. That's what we're doing here. We need an aluminum industry and a steel industry. The president stood up against the swamp," said Navarro.
He said as the president is eager to make the tariffs official. "The schedule is, these are going through legal review, Office of Legal Counsel for form and legality. We expect probably by the end of the week these will be signed."