President Trump vowed Saturday to continue imposing tariffs as a central part of his economic agenda and called his critics “fools,” pivoting sharply away from the free-trade message that senior advisers had tried to erect in recent weeks.
Trump, in Twitter posts before an Ohio campaign rally, said he was using tariffs, and the threat of tariffs, to try to force other countries to renegotiate trade deals with the United States. If they refused, as China has, then Trump said he would use the tariffs to punish the countries.
The Twitter posts came one day after China vowed to impose steep tariffs on $60 billion in U.S. exports in retaliation to large tariffs Trump is considering on $200 billion in Chinese exports.
After weeks of half-measure negotiations between the two countries, talks have broken down and now both the White House and Beijing are locked in a rapid escalation of trade threats that experts have predicted could damage both economies. Neither side is showing any sign of backing down.
Trump’s senior advisers, particularly National Economic Council Director Larry Kudlow and Treasury Secretary Steven Mnuchin, have said the White House’s ultimate goal is to remove tariffs and trade barriers in a way that makes “free and fair trade,” but Trump’s message on Saturday evening was one of protectionism and economic restrictions, not open markets.
And he said this approach has paid huge dividends, reviving the American steel industry and bringing manufacturing jobs to the United States.
Trump suggested that his use of tariffs has directly damaged the Chinese economy, something that he said would continue unless they agreed to his demands, which includes allowing more U.S. exports and investments.
But as is common with his Twitter posts, some of his claims were either unproven or incorrect.
For example, he claimed that China was financing advertisements to convince Americans to stop Trump’s trade agenda.
“China, which is for the first time doing poorly against us, is spending a fortune on ads and P.R. trying to convince and scare our politicians to fight me on Tariffs — because they are really hurting their economy,” he wrote on Twitter. “Likewise other countries. We are Winning, but must be strong!”
There is no evidence that the Chinese government is financing an advertising campaign in the United States to convince U.S. politicians that Trump’s approach is wrong. U.S. business and farm groups, which do extensive business with China, have complained for months about Trump’s strategy, but there are no signs that the Chinese government is paying for a campaign in the United States.
Likewise, another of Trump’s tweets claimed that foreign countries are paying the tariffs he has imposed on steel, aluminum and a variety of products being shipped from China.
“We are using them to negotiate fair trade deals and, if countries are still unwilling to negotiate, they will pay us vast sums of money in the form of Tariffs,” he wrote. “We win either way.”
This is false, and not how tariffs work. Trump has imposed tariffs on certain goods imported from foreign countries, but the foreign countries do not pay those tariffs. Rather, the U.S. importers bringing the products into the United States pay the tariffs. This makes the products more expensive and less attractive for U.S. consumers.
This could drive U.S. importers to stop bringing in certain goods because they are too costly, hurting the foreign manufacturers, but those foreign companies do not pay the tariffs, and neither do the foreign countries where those companies are based.
Trump has repeatedly used the threat of tariffs to try to force concessions from a range of U.S. trading partners around the globe, and this approach has had mixed success.
Leaders of the European Union have agreed to begin negotiations with the White House that would include buying more soybeans and energy products in exchange for discussions that could lead to a suspension of steel and aluminum tariffs, but those talks have just begun and the parameters are unclear.
Similarly, South Korean officials reached an agreement in principle in March to set a quota on steel and aluminum imports as a way to avoid tariffs, but no information about that deal has ever been disclosed.
Talks with China and Canada, however, have remained frosty, and Trump has promised to punish both economies if he doesn’t get his way.
Kudlow, a devout free-trade supporter who criticized Trump’s approach before joining the White House this year, has tried to steer the president toward an embrace of an idea that every country remove all of their tariffs in a way that would still achieve conservative political goals.
Trump has at times said he likes this idea, and some White House officials had hoped that this might cool conservative angst in Congress. But Trump’s Twitter posts Saturday evening reflected a much different mentality and suggest that the president prefers a much different strategy than one that resembles free trade.