Kevin Hassett, director of the National Economic Council, said on Sunday that President Donald Trump’s administration will hold onto its current tariff rates on other countries despite market volatility, describing the measures as “final deals.”
Why It Matters
Since the first introduction in early April, the Trump administration’s tariffs have sparked widespread criticism from both sides of the aisle. They have also triggered sharp declines in financial markets and increased global economic uncertainty, with major indexes falling and international partners warning of reprisals.
Hassett’s statements during his interview appearance on NBC News’ Meet the Press shows that the White House intends to hold steady on its tariffs even as economic data raises concerns about the impact they may have on growth, prices, and job creation as well as lasting consequences for global trade.
What To Know
Hassett confirmed to host Kristen Welker on Sunday that tariffs on America’s largest trading partners—including the European Union (EU), Japan, and South Korea—were “more or less locked in,” covering approximately 55 percent of global gross domestic product (GDP).
“The president will decide what the president decides. But the president likes those deals. The Europeans like those deals, and they’re absolutely historically wonderful deals,” the economic adviser said.
Hasset continued: “We’ve got Europe agreeing to open their markets to our products, so our farmers, our small businessmen, can sell stuff in Europe like they never could before, and they’re letting us charge a 50 percent tariff, which is going to raise maybe about $100 billion a year.”
Asked whether market turmoil could prompt Trump to reconsider or adjust tariff rates, Hassett replied, “No, I would rule it out. Because these are the final deals.”
He dismissed the notion that financial market backlash or investor uncertainty would trigger a policy reversal, saying in part that “the markets have seen what we’re doing and celebrated it.”
Hassett added: “So I don’t see how that would happen.”
These comments come on the heels of Trump dramatically widening the trade war, imposing new tariffs ranging from 10 to 41 percent on 60 countries. Key trading partners lacking bilateral agreements faced sharply higher rates. Meanwhile, Japan, South Korea, and the EU secured negotiated rates.
Meanwhile, the most recent jobs report showed U.S. employers adding 73,000 jobs in July, far lower than expected. This followed a disappointing trend in the latest months, as May and June job gains were also sharply downgraded.
On Thursday, Trump signed an executive order reimposing the “reciprocal tariffs” that were first announced on April 2 or “Liberation Day.”
Markets have reacted negatively, with the S&P 500 closing down 1.6 percent on Friday—the worst drop since May, according to The New York Times.
Photo by Anna Moneymaker/Getty Images
Deals Made
South Korea will face a 15 percent tariff on its exports to the U.S.
Trump announced a framework deal with Japan on July 22, including a 15 percent tariff on Japanese goods, down from a rate of 25 percent. The president said Japan would invest $550 billion into the U.S. and “open” its economy to American autos and rice.
The U.S. and EU announced a deal on July 27 that includes a 15 percent tariff on 70 percent of EU goods entering the U.S., down from 30 percent.
Trade officials from the U.S. and China, Asia’s largest economy and the world’s second-largest, met for two days in Stockholm last month after which China’s top trade official said the two sides had agreed to work on extending an August 12 deadline. Trump’s tariffs on Chinese goods previously totaled 145 percent and China’s counter-tariffs on U.S. products reached 125 percent.
Under a deal announced on May 8, the United Kingdom will face a 10 percent baseline tariff on its goods while Trump agreed to cut tariffs on British autos, steel and aluminum, among other pledges. The U.K. promised to reduce levies on U.S. products like olive oil, wine and sports equipment.
A July 22 deal with the Philippines includes a 19 percent tariff. Under a July 15 agreement with Indonesia, its goods will face a 19 percent tariff. Vietnamese goods will face a 20 percent U.S. tariff under a deal announced on July 2. U.S. goods will enter Vietnam duty free.
Canada and Mexico
Shortly before the August 1 deadline, Trump said he would enter a 90-day negotiating period with Mexico, one of America’s largest trading partners, with the current 25 percent tariff rates staying in place, down from the 30 percent he had threatened earlier.
For Canada, the tariffs on its U.S.-bound products not covered by the U.S.-Mexico-Canada trade agreement will rise to 35 percent from 25 percent, the White House said, as it blamed the higher tariffs on the smuggling of fentanyl over the northern border. However, Canada rebukes this, saying only tiny amounts of the drug are smuggled into the U.S.
What People Are Saying
President Donald Trump in his executive order on Thursday: “Other trading partners, despite having engaged in negotiations, have offered terms that, in my judgment, do not sufficiently address imbalances in our trading relationship or have failed to align sufficiently with the United States on economic and national-security matters.”
He continued: “There are also some trading partners that have failed to engage in negotiations with the United States or to take adequate steps to align sufficiently with the United States on economic and national security matters.”
Nate Silver, statistician and author, said in the Silver Bulletin on Sunday: “But for now, Republicans are the incumbent party — and if you ask me, tariffs and an economic slowdown are a far bigger threat to Trump’s political capital than the distractions that often dominate the news cycle from day to day. We have more evidence now that the economy is slowing down, probably because of tariffs. And Trump’s actions on Friday suggest he’s scared to face the consequences.”
Jeffrey Frankel, economist and professor at the Harvard Kennedy School, told Newsweek Saturday: “Regarding policies enacted, Trump’s tariffs may go down in history because the effects will be so bad and, much as the Smoot-Hawley tariff of 1930 did, may teach a generation or two about the harms of tariffs and the value of listening to warnings from professional economists, when they are virtually unanimous.”
What Happens Next?
The tariff rates are set to go into effect on August 7.
