CEA Chair Says Disagreement on Tariffs in Administration 'Healthy' but Trump Is Decider
White House Council of Economic Advisers Chair Stephen Miran is defending the formula used to impose reciprocal tariffs -- taking the trade deficit, dividing it by the amount of exports to a country, and dividing the result in two.
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Miran, at an event at the conservative think tank Hudson Institute, said, "It makes perfect sense you would use an approach like that if you wanted to address trade deficits."
Miran said that the decades of trade deficits the U.S. has had are a result of the dollar being the reserve currency, which he said keeps the dollar stronger than it would be if foreign countries didn't trade with each other in dollars, and if global investors didn't favor U.S. Treasuries. The latter helps keep borrowing costs low, he acknowledged, but makes American "products and labor uncompetitive on global stage."
Miran said the administration doesn't want the dollar to end its role as the reserve currency, but, to counterbalance the cost that imposes on U.S. goods exports, he said, other countries need to either accept tariffs without retaliation, buy more from American producers, boost defense spending and buy the equipment from the U.S., open factories in the U.S., or "simply write checks to Treasury."
He didn't address the fact that if foreign firms buy or open factories in the U.S., that is possible because they have a dollar surplus from their sales to U.S. buyers.
"President [Donald] Trump has made it clear that he will no longer stand for other countries free riding on our blood, sweat and tears, whether in national security or trade," he said.
Miran was asked why some in Trump's Cabinet are emphasizing how countries are coming to the table to try to negotiate lower tariffs, but White House trade adviser Peter Navarro is saying there is no negotiation for a national emergency.
"There are conflicting narratives because everybody’s got an opinion," he said. "And that’s fine. Disagreement is how you can avoid groupthink and I think that’s very healthy."
He said Trump will decide how much he is willing to lower tariffs, and for what proffers.
"I can’t speak to whether there will ultimately be a deal or not," he said. But, he called Trump "such a talented negotiator. His history on the creation of deals is pretty great."