Even if new tariffs on steel and aluminum spark an international trade war, President Donald Trump is confident the United States would come out on top.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win,” Trump tweeted Friday morning. “When we are down $100 billion with a certain country and they get cute, don’t trade anymore – we win big. It’s easy!”
The president appeared to be referring to his earlier comments on the current U.S.-Mexico trade deficit, a figure he claimed tops $100 billion. The United States had a net trade deficit of $63 billion with Mexico in 2016, according to census data.
According to the Commerce Department’s International Trade Administration and IHS Global Trade, Canadian and Brazilian steel accounted for 16 percent and 13 percent of U.S. steel imports as of September. Mexico was the fourth-largest source of foreign steel to the U.S., according to the findings.
Trump announced Thursday that he will impose 25 percent tariff on steel and a 10 percent tariff on aluminum as early as next week in an effort to force partners into “fairer” trade agreements.
Futures pointed to more losses Friday amid the tweet by Trump, which traders took to mean the president was sticking to this plan despite criticism from countries like Canada and Japan, companies, trade groups and members of Congress overnight.
“This hardly seems like a President likely to back down later today,” Peter Tchir, a macro strategist at Academy Securities wrote in a note. “It is still hard to see why he would undo so much of the good that was done with tax reform.”