The possibility that President Trump will impose new tariffs on imported cars is more of a sideshow compared to the trade “demolition derby” he is creating with China, according to David Stockman.
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“Tariffs on cars are irrelevant,” the former Reagan budget director said during an interview on FOX Business’ “After the Bell.” “Our tariff is 2.5% and you can get rid of it and you can get rid of the European tariff on passenger cars.”
The Trump administration’s tough stance on trade seems to be showing some results with U.S. Ambassador to Germany Richard Grenell returning to Washington with a peace offering from Germany’s largest automakers, who are supporting a 0% tariff for cars shipped between the European Union and the U.S.
But Stockman said the president’s trade policies will boost prices on U.S. goods from China, hurting the pockets of American consumers.
“Donald Trump is an ignoramus on trade,” Stockman said. “He has no idea what he is doing.”
The “Trumped!” author said the president is being advised by “absolute fruitcakes,” referring to White House National Trade Council Director Peter Navarro.
On Tuesday, Navarro told FOX Business that the tariffs are designed to defend U.S. industries against China’s predatory practices.
“The president is also considering investment restrictions which would prevent the Chinese from buying up Silicon Valley,” he said.
Stockman said “bad money” and not bad trade deals is the root behind the U.S. trade deficit with China.
“We’ve inflated our economy so that it is no longer competitive in the world market,” he said.