Companies and farmers may take a hit from
the retaliatory tariffs in what some say is a brewing trade war between the U.S. and China, but according to former McDonald’s CEO Ed Rensi, the tariffs are necessary to balance out trade disparities between the two economic powerhouses.
“Companies have enjoyed many years of the tariff base we have today,” he said during an interview with FOX Business’ Charles Payne on Thursday. “But things have got to change.”Already, the White House has imposed a 25% tariff on $50 billion worth of Chinese goods containing ‘industrially significant technologies.” In response, China slapped tariffs worth $34 billion on 545 American goods. In mid-June, Trump warned that if Beijing went through with the tariffs, he would impose tariffs on an additional $200 billion worth of goods. It was the latest in a series of tariffs imposed by the president in early February. The White House had initially announced tariffs – 25% on steel and 10% on aluminum – arguing they would protect U.S. companies and allow for the creation of new manufacturing plants, one of Trump’s main promises during the 2016 presidential campaign.
Trump has repeatedly argued that tariffs will eliminate the $370 billion trade deficit with China and stop Beijing’s theft of American intellectual property, which he’s said costs the U.S. billions of dollars each year.
“The imbalance is too insignificant, and if everybody in our government were to get behind Trump and advocate for free trade and better balance, I think we’d all be better off in the long term,” Rensi said.
Some companies -- like Harley-Davidson, which is shifting some of its production out of the U.S. in the wake of the retaliatory EU tariffs -- have complained about the tariffs hurting their profits. But that’s part of the complicated reality of trying to implement fair international trade, Rensi said.
“I think it’s OK for CEOs or farmers to talk about the pain they’re going to get,” he said. “It keeps everybody alert to how complicated this really is.”