- U.S. Trade Representative Jamieson Greer testified before the Senate Finance Committee on Tuesday, defending President Trump’s worldwide tariffs. He said they are a long-term strategy to drive down trade deficits with countries worldwide.
- Sen. Thom Tillis, R-N.C., and others expressed concern with the “alla prima” approach, which they said could hurt relationships with key allies.
- Greer said companies have already announced $4 trillion in new investment in the United States. At the same time, the stock market is down 9%, and countries plan to retaliate if they can’t negotiate a lower rate.
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“Whose throat do I get to choke if this proves to be wrong?” Sen. Thom Tillis, R-N.C., asked.
“I loved your fancy Greek formula, which was basically bad math on steroids formula,” Sen. Mark Warner, D-Va.
That’s the reception U.S. Trade Representative Jamieson Greer received on Capitol Hill on the morning of Tuesday, April 8, as he defended President Trump’s tariffs to Congress.
Greer repeated throughout the meeting that it’s a long-term strategy to drive down U.S. trade deficits with countries around the world.
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Is the plan working?
“Companies have announced $4 trillion in new investment in the United States,” Greer said. “Nearly 50 countries have approached me personally to discuss the president’s new policy and to explore how to achieve reciprocity.”
That was not enough for senators, who have seen the three major stock indexes drop about 10% each. They also read about the EU, Canada and China preparing retaliatory tariffs and heard from their constituents, who consist of consumers and business owners who can’t afford price increases.
“It just seems like we’ve decided to begin a trade war on all fronts. And that’s okay if the person who thought this through has an answer for why you go after partners that we have a very long, storied relationship with,” Tillis said. “Maybe we give some developing countries a break because we’re trying to get their economies functioning, make them look to the West rather than to China for investment.”
Further questions
The senators also questioned how the Trump administration plans to handle negotiations with 50 countries at once, given the timetable for the U.S.-Canada-Mexico trade agreement, negotiated during the first Trump administration.
“We did it at breakneck speed; we did it in about two years,” Greer said.
“Two years, and now you’re telling us you have nearly 50 countries, and you think that you can do that overnight?” Sen. Catherine Cortez-Masto, D-Nev., said. “Man, you’re pretty superhuman here if you can do that. So let’s be realistic.”
Lawmakers don’t like tariffs on allies
Tariffs on allies were a particularly contentious topic. The 10% duty applies to all countries, including those that already have trade agreements with the United States. It also applies to countries that are key defense and intelligence partners in NATO and the Five Eyes intelligence alliance, the world’s most advanced intelligence-gathering coalition.
The U.S. and Australia already have a free trade agreement and are both members of Five Eyes.
Sen. Warner could not understand why an ally like that would get a tariff.
“So getting the least bad — why did they get whacked in the first place?” Sen. Warner said.
“We’re addressing the $1.2 trillion deficit, the largest in human history, that President Biden left us with. We should be running up the score in Australia; they ban our beef,” Greer responded.
“Ambassador Greer, answer the question on Australia. We have a trade surplus with Australia, we have a free trade agreement, they are an incredibly important national security partner. Why were they whacked with a tariff?” Warner pressed.
“Senator, despite the agreement, they ban our beef, they ban our pork,” Greer answered.
A history of retaliation
There’s also concern that retaliatory tariffs will target specific industries, just as China did when it responded to President Trump’s 2018 tariffs with duties on U.S. soybeans in a tit-for-tat that ultimately cost U.S. agriculture $27 billion.
“On balance, I would say most of my constituents are supportive, and they recognize that some turbulence might be required in order to end up in a better spot and reset trade relations,” Sen. Todd Young, R-Ind., said. “I think one of the things I’m hearing from constituents back home is that trade retaliation doesn’t fall on everyone evenly. It has a different impact on a New York tech firm than it might have on a Hoosier soybean farmer. And I hope that’s something that’s being factored into your analysis.”
Greer was asked what businesses should do if they can’t afford added costs. He said President Trump is not making any exemptions. Greer added that businesses need to work with their suppliers and customers to figure it out.
