Trade chief defends Trump tariffs before skeptical Congress

U.S. Trade Representative Robert Lighthizer on Tuesday defended President Trump’s use of tariffs to squeeze concessions from adversaries and trading partners.

Lighthizer spoke before a Senate panel, where lawmakers expressed worries about recent moves by Trump ratcheting up the trade war with China and the potential blowback for the economy.

“If there’s a better idea than tariffs I’d like to hear it. I haven’t heard it,” he told the Senate Finance Committee when asked about Trump’s strategy if trade talks with China fail.

“I know one thing that won’t work, and that is talking to them, because we’ve done that for 20 years,” he added.{mosads}

Lawmakers from both parties have been critical of Trump’s decisions to threaten and impose tariffs in a multi-front trade war, complaining that the import taxes increase prices on U.S. consumers and invite retaliation that shuts exporters out of global markets.

Trump increased tariff rates on $200 billion of Chinese imports last months as trade talks between the two countries faltered. And the president has threatened to impose new tariffs on an additional $300 billion of imports. Those tariffs, along with existing ones, would hit nearly every Chinese import to the United States.

The moves have only sparked more anxiety about Trump’s strategy and the risk to the U.S. economy.

Lighthizer’s testimony also comes as the Office of the U.S. Trade Representative on Monday opened seven days of hearings, allowing businesses and other stakeholders to share their views on the proposed new China tariffs.

A number of companies, from fashion firm Kenneth Cole to streaming device manufacturer Roku, testified, many of them warning that the tariffs would raise costs that would be passed on to consumers or cut into companies’ revenues.

On Tuesday, Trump announced that he would hold “extended” discussions with Chinese President Xi Jinping at the upcoming Group of 20 summit in Japan, ending weeks of speculation as to whether the summit might provide an opportunity to revive talks.

“Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting,” the president tweeted.

Democrats at the hearing were scathing in their attacks on Trump and his trade policy.

“The president’s actions have driven away our allies, and there is no discernible strategy guiding the way forward,” said Sen. Ron Wyden (D-Ore.), the ranking member of the Senate Finance Committee.

“As a result of this mismanagement on trade, the American people are faced with the prospect that everyday life in this country will become more expensive and less secure,” he added.

Sen. Bob Menendez (D-N.J.) pressed Lighthizer on Trump’s standoff with Mexico earlier this month, in which the president threatened to impose 5 percent tariffs on all Mexican imports unless the country cracked down on immigration. 

Trump eventually relented, touting a deal with Mexico to reduce the flow of migrants into the U.S.

Menendez referred to the situation as “fabricated” and a “temper tantrum.” 

“Do you believe it was appropriate for the president to threaten tariffs on Americans because he doesn’t believe Mexico was doing enough on immigration?” he asked.

“Absolutely,” Lighthizer replied.

Republicans on the committee also expressed their concern over the trade wars, noting that farmers were losing global market share as trade tensions went unresolved.

“I share your view that strong and effective enforcement of U.S. trade laws prevent other countries from taking advantage of us,” said Finance Committee Chairman Chuck Grassley (R-Iowa). “But I don’t agree that tariffs should be the tool we use in every instance to achieve our trade policy goals.

“I fear that continuing to use tariffs in this way will undermine our credibility with our current and potential trading partners, and undo the benefits of our historic tax reform,” he added.

Since last March, Grassley said, Americans had paid nearly $22 billion in tariffs.

Much of the hearing focused on passage of the United States-Mexico-Canada Agreement, the administration’s update to the North American Free Trade Agreement.

Republicans called for passing the agreement as is, but Democrats sought assurances that Lighthizer would work with them to bolster enforcement and boost labor and environmental standards.

Democrats normally critical of the Trump administration’s policies have largely praised Lighthizer for his openness in working out differences on the trade deal. Lighthizer in turn said he was making progress with House Speaker Nancy Pelosi (D-Calif.) on how to advance the agreement.

“The Speaker has been completely fair and above board and, I think, constructive in the way she’s done it,” Lighthizer said.

“The Speaker, as far as I’m concerned, has been exactly as you hope she would be,” he added.