March 25, 2019

President Trump Unlikely To Eliminate Tariffs Even If Negotiations Result In Success

President Donald Trump addressed trade policy several times over the last week. His statements indicated that, even if negotiations with China and the European Union (EU) move forward and end successfully, his administration is unlikely to completely eliminate the tariffs it has imposed over the last year.

Regarding a potential deal with China, in a television interview Friday, the president said a deal “will probably happen,” but that he still will keep tariffs in place on Chinese imports into the United States for some time. Earlier in the week President Trump said, “We’re not talking about removing them, we’re talking about leaving them for a substantial period of time … Because we have to make sure that if we do the deal with China that China lives by the deal because they’ve had a lot of problems living by certain deals.”

The president’s statement came as news broke that U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer will be in Beijing this week to continue negotiations. If those talks go well, it could result in a Trump-Xi summit that could take place in April or as late as May or June.

On Friday, President Trump also addressed trade with the European Union, arguing the EU treats the United States “as badly as China” and pledging to keep 25 percent tariffs in place on light trucks imported from the continent. (As a reminder, last July, U.S. officials said they would not put imports on EU car imports as officials pursued a new trade agreement.)

Regardless of progress on the talks, the president said he won’t reduce tariffs to zero on EU car imports. President Trump explained, “Because they have BMW, they have Mercedes, they have a lot of very good cars that come in” and “I want them to make them here. Instead of making them over there, make them here.” According to Politico, in a report that has been submitted to the White House, the U.S. Department of Commerce has suggested “heavy new tariffs on foreign cars” are warranted. That report has not been released publicly. Connecting the Dots will continue to report on this issues as details of that study emerge.