President Donald Trump’s lieutenants have warned more protectionism is coming, as bosses from around the world brace for a new trade war.
US Commerce Secretary Wilbur Ross stated that America is prepared to hit back against rivals which seek to sell cheap goods abroad but impose high tariffs to keep their own economies safe from global competition.
His views were echoed by the country’s Treasury secretary Steve Mnuchin, who warned more crackdowns were to come from the United States.
On the attack: US Commerce Secretary Wilbur Ross stated that America is prepared to hit back against rivals
Ross claimed his nation had previously rolled over instead of trying to keep its workers’ jobs safe from competition overseas.
In comments likely to fuel speculation that America is limbering up for a battle over goods with China, Ross said: ‘There have always been trade wars. The difference now is US troops are now coming to the ramparts.
‘Trade wars are fought every single day. Unfortunately, every single day there are various parties violating the rules and taking advantage.’
It comes just a day after Trump outraged bosses by slapping tariffs on solar panels and washing machines.
The president has long believed that the United States gets a rough deal and gives rivals too much easy access to its markets.
Protectionism – increasing taxes for foreign imports to keep them out of the country – was a key plank of the America First policy which swept him to power over a year ago.
But Ross’s rhetoric privately shocked the mega-rich chief executives listening to his speech at the Davos forum.
They like to think of themselves as liberals saving the world with free trade, and are deeply opposed to higher tariffs.
World leaders from India’s prime minister Narendra Modi to Angela Merkel of Germany have used this week’s summit to promote the flow of goods across national borders.
the United States was seen – until Trump’s victory – as the biggest supporter of internationalism in the world, a perception that has now been sharply reversed.
Ross, who is a billionaire who earned his fortune by buying up bankrupt firms and then making them profitable, said: ‘We don’t intend to abrogate leadership, but leading is different from being a sucker.’
He added that the current system based on the World Trade Organization’s rules was designed for a different time, when poor foreign countries needed American wealth to rebuild after the Second World War.
‘There’s no longer a need to subsidise China or Japan or Europe with our money,’ Ross stated.
Jack Ma, boss of giant Chinese website Alibaba, warned against protectionist policies.
He said: ‘It is so easy to launch a trade war but it is so difficult to stop the disaster of this war.’ The tycoon added: ‘I am scared and concerned. I don’t think the world should... use trade as a weapon. Use trade as the solution to solve the problems. When you sanction the other country, you are sanctioning those small businesses and young people.’