WASHINGTON: US President-elect Donald Trump is likely to return to the issue of tariffs in negotiations with China, as well as consider tax cuts and new sanctions, his former Treasury Secretary said in an interview Thursday.
“I think that tariffs do need to be used to get counterparties back to the table, especially China, which is not living up to all of the agreements they made in the Phase One trade agreement,” Steven Mnuchin told CNBC.He was referring to a 2020 trade deal that followed a truce in a tariff war between Washington and Beijing.
The agreement saw China pledge to boost purchases of American products and services by at least $200 billion over 2020 and 2021. But the target was not met amid the pandemic. Mnuchin added Thursday that he would recommend Trump use tariffs in a “strategic way” to ensure there is not widespread inflation.
He noted that in his time in the Trump administration, tariffs were accompanied by exemptions for certain products US businesses needed. Additionally, he said energy prices need to be lowered to keep consumer costs in check.
In his first term, Trump lowered the corporate tax rate to 21 per cent and has since suggested lowering it further to 15 per cent. “If the corporate tax is going to be lowered, it should be lowered in a way that supports US manufacturing and US jobs as opposed to across the board,” Mnuchin said.
