President Trump’s top trade adviser defended the president’s use of tariffs, saying companies that have been forced to pay more for products should have developed new supply chains.
Speaking during a daylong testimony before House and Senate committees, U.S. Trade Representative Robert Lighthizer also said a trade deal with the United Kingdom before the November election would be “almost impossible,” and one with Europe was “not looking good in the short term” but would be necessary in the long run.
“I’m a firm believer that the things we need to fight this and the next pandemic should be made in America,” Lighthizer said on Wednesday, speaking to the House Ways and Means Committee. He called for more tariffs “down the road” on medical and pharmaceutical products made overseas.
U.S. businesses forced to pay higher prices for imported materials or other products should have, by now, found new suppliers, Lighthizer said. “We’re saying if you have a year or two years to make the change, then you should have made the change … people have had a substantial period of time to find another source.”
Global companies “thought they were so clever running these supply chains all over the world rather than making the stuff in the United States now realize they were taking on substantially more risk than they thought they were,” he added.
With less than six months before the presidential election, Lighthizer said that the timing of a deal with the U.K. remains unclear and is unlikely to happen before November. “That would be very, very, very quick time. I think it’s unlikely that that happens,” Lighthizer said. “It is almost impossible unless the members [of Congress] decided they want to do something extraordinary to have it actually come before the Congress before November.”
Negotiations on the deal, now in the second round, have been delayed by Britain’s agricultural standards inherited from the European Union. Agriculture will be a “very difficult” issue, Lighthizer said, and could become a “problem.”
He warned: “One thing’s for sure, we’re not going to be in a position where our farmers aren’t treated fairly.”
Lighthizer also took aim at Europe over claims of food safety concerns.
“If anything, I would say Europe is going in the wrong direction, not in the right direction,” he said, accusing Brussels of “thinly veiled protectionism” on food and agriculture imports. “They’re being controlled by protectionist interests,” he added.
Trump last year threatened to impose 100% tariffs on $2.4 billion worth of French wine, cheese, and cosmetics in retaliation for France’s digital services tax.
Lighthizer said he did not want taxes applied unfairly to U.S. companies and slammed efforts by the Organization for Economic Cooperation and Development to enforce a digital services tax.
“We have a situation where a variety of countries have decided the easiest way to raise revenue is to tax somebody else’s companies, and they happen to be ours,” Lighthizer said. “The reality is that they all came together and agreed that they would screw America, and that is just not something we will ever be a part of.”
Lighthizer added: “The president will use tariffs if he has to to get a fair shake for American businesses.”
Treasury Secretary Steven Mnuchin said in a letter Wednesday that negotiations over the tax were at an impasse.
