The two countries—India and China—have the highest tariffs but no inflation, an American businessman nominated by US President Donald Trump to be his commerce secretary told lawmakers on Thursday, arguing that there is no relationship between tariffs and inflation.
"The two countries with the highest tariffs, India and China, have the most tariffs and no inflation. It is just nonsense to say that tariffs cause inflation. It is nonsense," Howard William Lutnick, former head of Cantor Fitzgerald, told members of the Senate Commerce, Science, and Transportation Committee during his confirmation hearing.
He assured the senators that the US economy would be significantly better. "The price of a particular product may go up, but overall, this is not inflationary," he said.
Responding to questions, Lutnick stated, "The global trading environment is simply not favorable to us. Other countries impose higher tariffs, non-tariff trade barriers, and subsidies. They do not treat us well. We need better treatment, we need respect, and we can achieve that through tariffs to ensure reciprocity, fairness, and respect."
Noting that US farmers are often treated unfairly in global trade, he said, "Other countries take advantage of American kindness and generosity—our efforts to rebuild the world after World War II, the Korean War, and the Vietnam War. That disrespect needs to end."
"I believe tariffs are a way to ensure reciprocity, to be treated fairly and appropriately," he continued. "This approach will help our farmers, ranchers, and fishermen prosper, and I believe this administration is committed to that goal. That is why I am honored to serve President Trump in his efforts to restore reciprocity, fairness, and respect."
"These countries rely on the American economy, and they need to start respecting us now," Lutnick said, citing President Trump’s executive order directing the Department of Commerce and the US Trade Representative (USTR) to review tariffs.
"The broader tariff strategy is under review, as the president has initiated an executive order instructing the Commerce Department and the USTR to conduct a long-term study of the tariff model. In the short term, the pressing issue is illegal migration and, even worse, the influx of fentanyl into this country, which is killing over 100,000 Americans," he said.
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