Republican Louisiana Sen. John Kennedy appeared baffled on Wednesday by Cabinet Secretary Howard Lutnick’s responses regarding tariffs and trade barriers during a hearing on commerce.
Lutnick told Kennedy that he would “absolutely not” accept a deal where a nation offered to remove all tariffs and trade barriers on U.S. imports, leading Kennedy to ask what the purpose of reciprocity is with the current tariffs in place. The commerce secretary said that a country like Vietnam would buy from China and export to the U.S. if there were no tariffs or trade barriers.
“If Vietnam came to you tomorrow and said ‘okay, Mr. Secretary, you win. We’re gonna remove all tariffs and all trade barriers. Would the United States please do the same?’ Would you accept that deal?’” Kennedy asked.
“Absolutely not. That would be the silliest thing we could do. Vietnam has a $125 billion export to us and imports for us, $12.5 million. And you’re thinking, Vietnam exports $125 billion?” Lutnick began. “But where do they get it from? They buy $90 billion from China and then they mark it up and send it to us. So it’s just a pathway from China to us.”
When Kennedy asked the secretary to confirm whether he would take the dead, Lutnick responded “No! It’s a terrible deal. We’re the one with the money, we’re the one with the store. Of course they want us to take down [trade barriers and tariffs].”
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Lutnick then struggled to answer Kennedy’s question on the purpose of reciprocity between the U.S. and other nations.
“What is the purpose of reciprocity, then? Is reciprocity not one of your goals? Are you telling the president that we shouldn’t seek reciprocity? If that’s what you’re telling him, why are you trying to do these trade deals?” Kennedy asked.
“What do we want? We want to encourage Vietnam to produce great products. They’re great at producing,” Lutnick began.
Kennedy, appearing confused by Lutnick’s answer, asked why these trade deals are being negotiated with other countries if reciprocity is not the goal. Lutnick told the senator that he would reject any nation’s deal that offered the U.S. the “ultimate reciprocity,” meaning no tariffs and no trade barriers.
“If a country came to you and offered you the ultimate reciprocity, no tariffs, no trade barriers in return for us doing the same, you would reject that?”
“Of course, because they buy from China and send it to us,” Lutnick said.
“But if they said we won’t buy from China?” Kennedy asked. “Would you accept that deal?”
The commerce secretary said the U.S. would “consider” a deal with no tariffs or trade barriers if the nation agreed not to buy from China. He said the deal would only apply to certain products because the U.S. wants the ability to manufacture its own goods.
Removing trade barriers and tariffs would benefit the consumer and businesses by lowered costs and increased purchasing power. Since imposing reciprocal tariffs on April 2, Trump issued a 90-day pause on most nations and negotiated a deal with China that lowered its tariffs from from 145% to 30%, while China’s retaliatory tariffs on the U.S. dropped from 125% to 10%.
Trump threatened to impose a 50% tariff on the European Union (EU) on June 1 over their lack of trade concessions during the 90-pause. The president announced on Sunday that he agreed to delay the tariff until July 9 after discussing the matter with Ursula von der Leyen, the president of the European Commission.
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