Trump held a freewheeling White House meeting on trade — and it sounds like some of economists’ worst fears could come true

President Donald Trump Alex Wong/Getty Images

  • President Donald Trump held a discussion with senators from both parties on trade, specifically possible action on steel and aluminium imports.
  • Lawmakers repeatedly attempted to urge caution on the use of tariffs, while Trump complained about unfair trade practices by foreign countries.

President Donald Trump held a meeting on trade at the White House on Tuesday and raised the spectre of possible protectionist policies while pushing back on senators suggestions that new tariffs could be bad for the US economy.

The meeting was to discuss possible upcoming action on steel and aluminium imports after a review by the Department of Commerce. Trump told the assembled group of bipartisan senators that the administration is considering “substantial tariffs” on these imports – particularly focused on China.

In the following discussion, lawmakers attempted to being up concerns over certain protectionist policies, but Trump mostly brushed off the concerns, saying the US is “like the stupid people” when it comes to trade.

The president also repeatedly extolled the virtues of tariffs, or taxes on imports, saying that increased tariffs could bring back the steel industry and create new jobs.

Trump complained that the US was like a “piggy bank to China,” has defended Saudi Arabia and South Korea without getting anything in return, no longer makes TVs in the US, and that there were no American cars in Germany.

“How many Chevrolets do you see in the heart of Berlin? Not too many, not too many,” Trump said.

Economists have long worried that Trump’s more protectionist trade positions could manifest in higher barriers to trade or tariffs. This in turn could cause countries to retaliate against the US and trigger a trade war in which other countries retaliate and increase tariffs of their own.

In the event of a trade war or serious retaliatory efforts, economists warned that in the worst-case scenario, the US would be pushed into a recession.

The president already set off alarm bells on the trade front by suggesting the US impose a “reciprocal tax” on imports during another meeting on Monday.

Similar concerns were raised by lawmakers from both sides of the aisle in the meeting. GOP Sen. Pat Toomey warned Trump of “retaliation” to any new steel tariff and said it could cause price increases for consumers.

“I would urge us to go very, very cautiously here,” Toomey said.

In response to Toomey’s concerns, Trump brought up India’s high tariffs on American motorcycles and again called for “reciprocal taxes.”

When GOP Sen. Mike Lee cautioned against the possible negative effect on the US job market from tariffs, Trump brushed off the idea and said many foreign companies would just “eat a lot of the tax.”

GOP Sen. Ron Johnson also mentioned that bringing a slew of steel and aluminium jobs back to the US may not go as smoothly because the US labour market is nearing full capacity and the unemployment rate is the lowest it has been in 17 years.

Trump suggested that there are 100 million people available to take those jobs, apparently in reference to the number of people outside of the labour force. That number includes everyone over the age of 16, including the disabled, students, and the elderly.

When steel tariffs imposed by President George W. Bush in 2002 – which prompted a serious response from foreign countries – were brought up by GOP Sen. Lamar Alexander, Trump also downplayed concerns and implied the current administration could do it better than Bush.

“It didn’t work for Bush, but it worked for others,” Trump said.

Trump has until April 11 to make a determination on the steel and aluminium trade actions.