(Bloomberg) -- President Donald Trump's plans to tariff steel and aluminum, which may prompt a global trade war, will not hurt his projections for U.S. growth, Treasury Secretary Steven Mnuchin said.
“We're comfortable that we're going to manage through this so that it is not detrimental to our growth projections,” Mnuchin said in a Fox Business interview with Maria Bartiromo Wednesday. “We're comfortable with the economic impact,” he said of the tariffs.
Mnuchin reiterated the administration's commitment to levy heavy tariffs on the metals, saying that the plan is “nothing new” and has been part of Trump's “focused strategy” since his presidential campaign.
Trump's call for tariffs on steel and aluminum imports has prompted an outcry not just from trading partners but also from within his administration and the Republican Party over concerns they will spark a global trade war. Republican lawmakers are pressuring Trump to at least curtail the tariffs' reach to certain forms of the metals or by targeting a limited number of countries.
The threat of retaliation and escalating tit-for-tat penalties damaging growth around the world is already rising. The EU warned Tuesday it would respond with its own 25 percent tariff to hit $3.5 billion of American goods. The bloc is targeting iconic U.S. brands produced in key Republican states on a range of consumer, agricultural and steel products that will be levied if Trump goes through on his tariff threat, according to a list drawn up by the European Commission.
Read More on Businesses at Risk From Trade War With China
Trump is “not afraid to get into a trade war, although that's not what we want,” Mnuchin said. “We are definitely going to end up with these tariffs and we are going to roll these out quickly.”
Mnuchin has said that Canada, the U.S.'s biggest supplier of steel, could gain relief from the tariffs along with Mexico if they can reach an agreement with Trump on renegotiating the North American Free Trade Agreement. The tariffs won't apply to the U.S. neighbors if a new trade deal is concluded, he said. Renegotiating the deal is key to improving the trade imbalance with China, he said, which will lead to a better investment environment for American businesses.
“We have to stand up for American companies,” Mnuchin said.
Trump Commerce Secretary Wilbur Ross also signaled the administration is open to exempting countries besides Mexico and Canada from the tariffs.
“The president indicated that if we can work something out with Canada and Mexico, they will be exempted. It's not inconceivable that others could be exempted on a similar basis,” Ross said in an interview. “Whenever there's a big change -- an unexpected change -- you have to expect some sort of a negative reaction. Let's see how things come out over the longer term.”
--With assistance from Kevin Cirilli and Terrence Dopp
To contact the reporter on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net.
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Elizabeth Wasserman, Elizabeth Titus
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