Wilbur Ross, an American investor and the current United States Secretary of Commerce, told George Stephanopoulos on Sunday that it’s not true the tariffs on steel and aluminum will cost American jobs and American consumers.
The Actual Numbers
“Let me give you some actual numbers,” Ross said. “Those sloganeerings don’t really mean much until you put them into numbers. On an average car, it’s $175 worth of steel increase is the maximum that would come from a 25 percent tariff increase. That’s not much.”
Stephanopoulos interrupted, saying that’s without European retaliation.
Ross interrupted him: “No, let me continue. Similarly, all the other products, the total amount of tariffs we’re putting on is about $9 billion in a year. That’s a fraction of one percent of the economy. So the notion that it would destroy a lot of jobs, raise prices, disrupt things is wrong. As to the idea of retaliation, sure there may well be some sort of retaliation. But the amounts that they’re talking about are also pretty trivial. It’s some $3 billion-odd of goods that the Europeans have threatened to put something on.”
“Well in our size economy, that’s a tiny, tiny fraction of one percent. So while it might affect an individual producer for a little while, overall it’s not going to be much more than a rounding error.”
When Stephanopoulos said it sounds like we are already in a trade war, Ross explained that the concessions we gave at the end of WWII made sense at the time but no longer.
The Trade Concessions Date Back to World War II
“Well, think about it, we have unilaterally given away all kinds of concessions ever since the end of World War II. And in the beginning that was probably good policy to rebuild Europe and rebuild Asia after the ravages of the war. The mistake that our trade negotiators made way back then, and continued to make, was not time limiting it. Concessions that were perfectly reasonable to make to Germany in 1945 or China in 1945 don’t make sense anymore. Those are now very mature, big, strong economies.”
“So, there’s a lot of history that needs to be undone.”
Ross also explained what the President meant when he said: “trade wars are easy to win.”
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“Well, I think what the president had in mind was that unlike the Smoot-Hawley days in the 1930s, back then the U.S. had a big trade surplus and the world was in a depression. Now, we have a big trade deficit. Well, if we have a big trade deficit with our other partners, they have a lot more to lose than we do, because those hundreds of billions of dollars are in their pockets now, not ours.”
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