After President-elect Donald Trump fired an opening salvo in his quest to renegotiate the North American trade pact, a chorus of economists and market watchers fears this could be the beginning of a trade war between the United States and the rest of the world.
Trump, taking on Truth Social on Nov. 25, announced 25 percent tariffs on all imports from Canada and Mexico and a 10 percent levy on Chinese goods on his first day in the White House. The purpose behind this decision is to curb the flow of illegal immigrants and drugs.
“I think the danger of an all-out, big trade war is very small,” former Commerce Secretary Wilbur Ross said in an interview with The Epoch Times.
Ross has seen it all before, serving as head of the Commerce Department in Trump’s first four years in the Oval Office.
The Wall Street veteran was a prominent voice in advancing the president’s first-term trade agenda. In addition to championing Trump’s tariff plans, Ross was instrumental in negotiating trade agreements, including the United States-Mexico-Canada Agreement (USMCA), which substituted the decades-old North American Free Trade Agreement, also known as NAFTA.
While he believes that Trump’s latest measures have been bold, he thinks the president-elect and his team will refine these policies comparable to those under Trump 1.0.
In 2018, Trump imposed sweeping tariffs on aluminum and steel imports. Later, he slapped levies on appliances and electronics, like refrigerators, dishwashers, and flat-screen televisions. However, Ross says, the administration would enact modifications, such as granting exemptions to Australia, Canada, and South Korea.
During Trump’s first presidency, the administration approved exemptions to more than 2,200 products for two reasons. The first is if the foreign product is not available domestically. The second is the companies’ appeals that the tariffs would cause significant harm.
Incoming administration officials have expressed a more conservative approach to trade talks, and Ross thinks this will occur.
“I think we should expect there will be continuing refinements of his thinking,” Ross said.
“My general view is that at the end of the day, he’s a free trader,” Bessent stated. “It’s escalate to de-escalate.”
Incoming Commerce Secretary Howard Lutnick, another seasoned Wall Street investor, has also stated that Trump speaks in sweeping statements to get the public to understand.
While Lutnick will have control over the trade negotiating process, “the big decisions are going to be made, and appropriately so, by the president,” Ross said.
“I think everyone else will be offering advice, will be offering fine-tuning, will be offering recommendations, but ultimately, these are presidential decisions.”
In the end, he believes that the primary message from the incoming administration is that the president-elect will impose many more tariffs on products from other countries, particularly China. The aim, Ross notes, is not to erect global trade walls but rather to encourage nations and foreign companies to make concessions to rectify the “inequitable relationship that we have now.”
“His objective is to level the playing field,” Ross stated.
In the early days of the first Trump presidency, Ross was tasked with conducting studies on the auto industry.
In a meeting with European auto executives, Ross informed them that the study was close to finishing, and it would likely conclude that high tariffs on their cars entering the United States would be necessary. To avoid these levies, their companies would need to announce more facilities in the United States.
Targeting Trade Treaties
The president-elect has been open about renegotiating the USMCA.Ross says that other nations have failed to meet the commitments outlined in these trade treaties.
Mexico, for example, has not privatized its oil and gas sector since the agreement’s enactment. In recent years, the United States has requested dispute settlement consultations with Mexico regarding the challenges surrounding Mexico’s agreed-upon energy reforms.
Ross also cited Mexico’s failure to address the government’s years-long politicization of the judicial system, which was a provision inside the USMCA.
“The Mexican judicial system was supposed to be an independent body that would help adjudicate disputes between the three parties or among the three parties to the agreement, but they’re politicizing it,” Ross stated.
The country’s judicial system recently captured the spotlight. In September, as part of a set of constitutional reforms, lawmakers gave the nod to controversial sweeping changes to the courts by having judges elected by the public rather than appointed. However, critics say politicians decide what candidates are added to the ballots, meaning the judicial branch will remain politicized, which could hamstring USMCA negotiations.
It is not only Mexico that has resisted satisfying a trade pact’s requirements.
The incoming Trump administration might seek to tighten arrangements with trading partners. Heading into these negotiations, the United States might possess an advantage because the global economy differs from a few years ago. Put simply, Ross said, many advanced countries cannot afford to engage in a significant tariff war.
“I think some of this recent publicity about various thoughts that he has regarding tariffs are very possibly going to result in some good results, even before they’re enacted,” Ross said. “I think showing the same vigor in trade is very likely to change the behavior of other countries.”
So far, he might be right, as tariff threats are pushing America’s trading partners to act.
Trump also said, following a conversation, that the Mexican leader vowed to stop people from entering the U.S. southern border.
Optimistic About 2nd Trump Term
After a storied half-century career on Wall Street and four years in the White House, Ross paused and looked back at his life, releasing a new memoir titled “Risks and Returns: Creating Success in Business and Life.”The autobiography examined the array of challenges he has grappled with, giving readers, at whatever stage they are at, an opportunity to draw messages from his own life and business career. It also sheds light on the Trump administration.
“It does talk to some degree about the Trump years because they obviously were an important part of my life,” Ross said.
The book, for instance, discusses Trump’s relations with several world leaders, including Chinese leader Xi Jinping and former German Chancellor Angela Merkel.
He highlighted Trump’s first meeting with the Chinese leader during a state visit to Mar-a-Lago. This was a notable event, Ross said, because Trump had just finished convening a National Security Council meeting to launch 52 missiles into Syria in retaliation for an attack on a U.S. airbase.
“Trump chose to announce the missile launch during the ceremonial opening dinner with President Xi,” Ross said. “The decision was intended to send a strong message to Iran, China, and others about the consequences of pushing the U.S. too far.”
“I think his willingness to do that in such a dramatic way is why there was relative peace and quiet in the world,” during Trump’s first administration, he said.
Ross said he is optimistic about the next four years because of his experience and the results of the first Trump term.
