Commerce Secretary Wilbur Ross downplayed on Thursday the impact of the White House’s move to hit China with 25 percent tariffs on $200 billion worth of imports, up from its original plan of just 10 percent tariffs. Ross argued that even then, the impact on the U.S. economy would be fairly marginal.
“Well, let’s put it into arithmetic perspective. 25 percent on $200 billion, if it comes to pass, is $50 billion a year. $50 billion a year on an $18 billion or so — $18 trillion or so economy is three-tenths of 1 percent. It’s not something that’s going to be cataclysmic,” Ross told Fox Business Thursday.
The commerce secretary defended the move, saying whatever pain it caused was necessary to force China to make concessions at the bargaining table. “The reason for the tariffs to begin with was to try to convince the Chinese to modify their behavior. Instead, they’ve been retaliating. So the president now feels that it’s potentially time to put more pressure on in order to modify their behavior. … We have to create a situation where it’s more painful for them to continue their bad practices than it is to reform them. That’s the purpose of the whole exercise.”
The $200 billion in tariffs is still at the proposal stage and wouldn’t likely go into effect for a few months. It would come on top of previously enacted 25 percent tariffs on $34 billion of Chinese goods, and 25 percent tariffs on imported steel and 10 percent on imported aluminum, both of which were primarily directed at China.
Ross said that the administration would consider exceptions for companies on a case-by-case basis. “We have been excluding over 1,000 products already and every day we’re adding more to the list. So this is not a hip-shooting exercise. This is a very carefully thought-through one with a very open and transparent process for people requesting exclusions for those companies who feel they can meet the need to protest the request, prove that they can supply the material, and then we make a judgment who’s right,” Ross said.
Beijing has vowed retaliation. “U.S. pressure and blackmail won’t have an effect,” Chinese Foreign Ministry spokesman Geng Shuang told reporters Wednesday. “If the United States takes further escalatory steps, China will inevitably take countermeasures and we will resolutely protect our legitimate rights.” China has already established 5 to 25 percent additional duties on $3 billion in U.S. imports in reaction to earlier White House tariffs.
