US Trade Chief Defends Use of Tariffs in Senate

WASHINGTON (CN) – The Trump administration’s top trade negotiator testified Tuesday before the Senate Finance Committee in support of the replacement for the North American Free Trade Agreement, brushing off Democrats’ concerns about tariffs and how they affect trade deals.

President Donald Trump, Canada Prime Minister Justin Trudeau, right, and then-Mexico President Enrique Pena Neto, left, participate in a trade agreement signing ceremony Nov. 30, 2018 in Buenos Aires, Argentina. (AP Photo/Pablo Martinez Monsivais)

U.S. Trade Representative Robert Lighthizer appeared before the panel to defend the trade agreement signed last November by President Donald Trump, Canadian Prime Minister Justin Trudeau and former Mexican President Enrique Pena Nieto. The agreement still awaits congressional approval.

By the end of May, Trump was embroiled in a standoff over border security with Mexico. He threatened the country’s imports with a 5% tariff, which would climb monthly to a peak of 25% in October. A deal was reached just days before the tariffs were set to take effect.

Senator Robert Menendez, D-N.J., was one of several lawmakers in Tuesday’s hearing that raised concerns about effects of implementing tariffs, pointing to the recent dispute with Mexico despite the pending trade agreement.

Menendez asked if it would be appropriate for the president to use tariffs as negotiating tools against countries that haven’t pulled out of the Iran nuclear deal, for example, or countries he felt were not doing enough to block a waterway from trade routes.

Lighthizer said he had not given those hypothetical issues more than “five seconds of thought.”

“I’m going to call him ‘Tariff Man,’” Menendez said. “He thinks that tariffs are the end-all and be-all at the end of the day and it’s a dangerous economic game to play, especially when we’re not talking about trade-related issues.”

Menendez also mentioned the United States’ tumultuous relationship with China, saying the uncertainty of retaliation through tariffs for other countries might make relationships even more strained. As trading partners, he said predictability is something most countries will look for when entering into trade agreements and surprise tariffs won’t help.

“When I make a deal with you and then you start tariffs on me for something that has absolutely nothing to do with trade, then that is unpredictable,” Menendez said.

Senator Sherrod Brown, D-Ohio, talked about “getting tough” on China, and said he was all for taking measures to retaliate against currency and trade manipulation tactics. However, he said China has not been labeled a currency manipulator since 1994 and lawmakers are concerned about a backup plan if Trump’s China tariffs are unsuccessful.

Lighthizer responded that the U.S. has already made inroads to develop relationships with other countries, including Japan and European nations, to develop that Plan B. He said the countries have already had eight meetings.

“I don’t know if it will get them to stop cheating, tariffs alone, I think you don’t have any other option,” Lighthizer said of China. “If there’s a better idea than tariffs, I’d like to hear it. I haven’t heard it. But I do know that you and I agree that just chatting with them in a dialogue is not going to get them to change.”

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