Commerce Secretary Howard Lutnick said President Trump’s tariffs are “worth it” – even if they trigger a recession.
Economists have warned that the president’s stiff tariffs on Canada and Mexico, which are on a 30-day pause; his 20% levy on China; and his sweeping aluminum and steel tariffs could reheat inflation.
Trump’s back-and-forth approach to implementing the tariffs, and the costly risks from retaliatory tariffs, have stoked intense market volatility, wiping out post-election gains.
But Lutnick staunchly defended the president’s trade policies on Tuesday during an interview with CBS News.
“These policies are the most important thing America has ever had,” Lutnick said, when asked whether they would be worth it if they caused a recession. “It’s worth it.”
He quickly shifted gears, adding, “The only reason there could possibly be a recession is because the Biden nonsense that we had to live with.”
“These policies produce revenues. They produce growth. They produce factories being built here,” he continued.
Earlier this week, Trump declined to rule out that his policies might lead to a recession.
“I hate to predict things like that,” he told Fox News. “There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing, and there are always periods of, it takes a little time. It takes a little time, but I think it should be great for us.”
The president has faced backlash for taking aim at Canada and threatening to double the tariffs on their steel and aluminum imports to 50%.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” he wrote in a post on Truth Social on Tuesday. “This would make all Tariffs, and everything else, totally disappear.”
The tariffs ultimately took effect on Wednesday at the original 25% rate.
Lutnick argued that Trump’s flip-flopping on proposed tariffs serves a purpose as a negotiating tool.
“When you’re negotiating with someone and they’re not paying attention and they’re disagreeing, the president, who’s the best dealmaker ever to sit in that chair, he’s going to say, ‘Here’s my response,’” Lutnick told CBS News. “And then all of a sudden, shockingly, they respond.”
He said the markets will learn to adjust to the president’s tactics, and denied that there’s any chaos in Trump’s tariffs.
“It is not chaotic, and the only one who thinks it’s chaotic is someone who’s being silly,” Lutnick said.
The 50% threatened tariffs on Canada, for example, were to “break some guy in Ontario who said he was going to tax American energy 25%,” Lutnick added.
On Thursday, Trump made his latest threat — 200% tariffs on all alcohol products coming from the European Union.
Soon, countries negotiating with the US will “realize it doesn’t need to do it this way,” Lutnick continued.
“Let the dealmaker make his deals,” he said.
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