(CNSNews.com) - National Economic Council Chairman Larry Kudlow said Wednesday that if foreign countries lower their trade barriers, the U.S. will export “significantly more” goods “across the board.”
Kudlow said the U.S. economy is thriving because of Trump’s decision to lower tax rates and rollback regulations.
“The United States economy is going through a very positive transformation right now, as I said earlier: lower tax rates, rollback of regulations. The war against business is over. The war against success is over. The war against energy is over. We have now freed up the animal spirits. You can see that by the confidence indexes. We're rolling. The U.S. economy is rolling,” he said.
When President Donald Trump travels to Charlevoix, Canada, on Friday for the G7 meeting, he’s expected to discuss trade and shared security among U.S. allies, and a topic that is likely to come up is the president’s decision to impose tariffs on foreign steel and aluminium. Kudlow spoke to reporters at the White House Wednesday about the president’s upcoming G7 meeting.
“The president often talks about trade deficits as if they're their own problem and other countries aren't buying our goods. I know that you're saying that the issue is tariffs, and lowering trade barriers will reduce trade deficits. What happens when the tariffs come down, the barriers come down, and the trade deficit doesn't go down? What happens then, sir?” a reporter asked.
“Well, look -- you know, supply and demand, and global markets subject to macroeconomic factors, that stuff is pretty hard to predict, but I think it is reasonable to assume that if our neighbors and allies, and whoever, lower their trade barriers, we will export significantly more, frankly, across the board,” Kudlow said.
“And if I could expand on that thought. The United States economy is going through a very positive transformation right now, as I said earlier: lower tax rates, rollback of regulations. The war against business is over. The war against success is over. The war against energy is over. We have now freed up the animal spirits. You can see that by the confidence indexes. We're rolling. The U.S. economy is rolling,” he said.
“So if you give us a chance, foreign countries, we will fill that bill. We will increase export sales in a significant way. Now, I can't promise -- nor would I predict -- future trade gaps, but I'm saying it is bound to have a positive impact,” Kudlow added.
“But, sir, when the president talks about, for instance, automobiles, he complains that, for instance, Germans don't buy American cars. Germany has a luxury car industry that's world-renowned. Why would they buy our own cars? That's supply and demand right there. It sounds often like the president's problem is that other countries aren't buying our goods, not that we're not able to sell them to other countries,” the reporter said.
“By and large, I don't agree with that, but let me just back up. Here's the president's key thought on this: reciprocity. And one of the problems, one of the reasons for the breakdown of the trading system -- the world trading system, as I described, which the president is trying to fix -- in the last 20-some-odd years, we've seen a lack of discipline. Tariff and non-tariff barriers have gone up. There has been a lot of protectionism,” Kudlow said.
Kudlow said the U.S. has the lowest average tariff in the world.
“And if you go down a laundry list of industries, you will see we are much lower. Our tariff rates are much lower than our competitors,” Kudlow said. He said the president wants the U.S. to have “a level playing field.”
“He calls it ‘reciprocity.’ I think it's a very apt description, and that's the problem. If you bring down the barriers, and you equalize the level of the playing field, then we'll let nature take its course. We'll let markets take their course, and we will see, but I think the products we make here have improved enormously and will continue to improve enormously, and that's really the message of this economic recovery,” Kudlow said.
“So we'll wait and see on that, but that's the mechanism. As I said to the other question, the way you lower your trade gap, the way you increase your exports is lower the barriers. And again, I want to say, other presidents, in both parties, have paid lip service to this issue of the lack of reciprocity and China's particularly bad behavior, but nothing ever comes of it,” he said.
Kudlow said Trump “has the backbone to take the fight, and he will continue to make the fight because he believes it is in the best interest of the United States and also the rest of the world.”